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Canadian  Institute  for  Historical  MIcrorBproductlons  /  Instltut  Canadian  de  mlcroreproductlons  historlque. 


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n 


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14x 

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lOv 

Tht  copy  filmad  h«r«  hat  b««n  raproduead  thanks 
to  tha  ganarosity  of: 

NatioMi   Library  of  Canada 


L'aiamplaira  filmi  fut  raproduit  grica  A  la 
ginirositA  da: 

BibllotMqu*  national*  du  Canada 


Tha  imagat  appaaring  hara  ara  tha  baat  quality 
poitlbla  conaidaring  tha  condition  and  laglbility 
of  tha  original  copy  and  in  kaaping  with  tha 
filming  contract  spacificationa. 


Original  copiaa  in  printad  papar  covara  ara  fllmad 
baginning  with  tha  front  covar  and  anding  on 
tha  last  paga  with  a  printad  or  illustratad  impraa- 
sion,  or  tha  back  covar  whan  appropriata.  All 
othar  original  copiaa  af  filmad  baginning  on  tha 
first  paga  with  a  printad  or  illuatratad  impraa- 
sion.  and  anding  on  tha  last  paga  with  a  printad 
or  illuatratad  imprassion. 


Tha  last  racordad  frama  on  aach  microficha 
shsll  contain  tha  symbol  — ••  (maaning  "CON- 
TINUED"), or  tha  symbol  V  (maaning  "END"), 
whichavar  applies. 

Maps,  platas.  charts,  ate,  may  ba  filmad  at 
diffarant  raduction  ratios.  Thosa  too  larga  to  ba 
antiraly  inciudad  in  one  axposura  ara  filmad 
baginning  in  tha  uppar  laft  hand  cornar.  laft  to 
right  and  top  to  bottom,  as  many  framas  as 
raquirad.  Tha  following  diagrams  illustrata  tha 
mathod: 


Las  imagas  suivantas  ont  ttt  raproduitas  avsc  la 
plus  grand  soin.  compta  tanu  d«  la  condition  at 
da  la  nattat*  da  I'axamplaira  film*,  at  sn 
conformit*  avac  las  conditions  du  contrat  da 
filmaga. 

Las  axamplairaa  originaux  dont  la  couvartura  an 
papiar  ast  imprim«a  sont  film4s  tn  commandant 
par  la  pramiar  plat  at  an  tarminant  soit  par  la 
darniAra  paga  qui  comporta  una  S'.ipreinta 
d'imprassion  ou  d'lllustration.  soit  par  la  sacond 
plat,  salon  la  cas.  Tous  las  autras  axamplairas 
originaux  sont  film«s  an  commandant  par  la 
pramiira  paga  qui  comporta  una  amprainta 
d'imprassion  ou  d'illustration  at  tn  tarminant  par 
la  darniAra  paga  qui  comporta  una  talla 
amprainta. 

Un  das  symbolas  suivants  spparaitra  sur  la 
darniira  imaga  da  chaqua  microfiche,  salon  la 
cas:  la  symbola  — ^  signifia  "A  SUIVRE "   la 
symbols  V  signifia  "FIN". 

Las  cartas,  planchas,  tableaux,  etc.,  peuvent  *tre 
filmis  A  des  taux  da  reduction  diff«rents. 
Lorsque  le  document  est  trop  grand  pour  *tre 
reproduit  en  un  seul  clich*.  il  est  film*  *  partir 
de  I'angle  iup*rieur  gauche,  de  gauche  *  droite, 
*!.***  ^*"*  •"  ''•••  •"  P'«"*nt  le  nombre 
d'imagas  n*cessaire.  Les  diagrammes  suivants 
illustrent  la  m4thode. 


1  2  3 


-mm 


Carnegie  Eiuiowiaent 

WyWMt  Of  ICiMMieS  iM  MOTfilV 


^REUMIllAIlt  ECONOMIC  STUDIES  OF  THE  WAR 


•^^f%i 


KOITBO  BT 
DAVID  KINLET 


Nl 


'..* 


# 


INFLUENCE  OF  THE  GREAT  WAR 
UPON  SHIPPINCi 


»T 


J    RUSSE  .^  SMITH 

Proftuor  of  Gtoynphy  aod  Indiutrv,  UnUmity  of  P»tuinU..rij 


YORK 

OXFORD  UNIVERSITY  PRESS 

AMERICAN  BRANCH  :  S  Witr  12»»  Stiiit 
LONDON.  TOBNTO    UKLBOURNE    AND  BOUBAV 

1919 


^c?> 


arnegie  Endowment  for  International  Peace 


DIVISION  or  ECONOMICS  AND  HtSTORY 
lOHN  MTIS  CURK,  (HIIICTM 


PREIJMINARV  ECONOMIC  STUDIES  OF  THE  WAR 


CDITeO  BY 

DAVID   KINLFV 
ProlnMr  of  Poliii»l  EcoMxar.  Ualvtnliy  •(  lllliala 
Mmkcr  «<  Ccaarint*  ol  RMnnk  a<  ik«  Eadooami 

No.  9 


INFLUENCE  OF  THE  GREAT  WAR 
UPON  SHIPPING 


•Y 


J    RUSSELL  SMITH 


Priilr:  i>i  III  (irii|;r;4|iliv  and  Intluitry,l'nivrr'>ity  iif  I'enniylvanU 


NEW  YORK 

OXFORD  UNIVERSITY  PRESS 

AMERICAN  BRANCH:  X  WtiT  32iiD  Stiiit 
LONDON.  TORONTO.  MELBOURNE.  AND  BOMBAY 
1919 


«< 


\\\\\ 


ur 


(OI'VKK.IIl   l»ll' 
•V  mi 
tARNKlllE  KNIHJSVMKNT  IKK  IM  KKNA  1  ION  Al.  It.ACK 
K  )»tiiiuii  I'lA-i,  \\»t»i»<ireii«.  t).  < 


U  911457 


EDITOR'S  PREFACE 


Thi*  monotjraph  on  shippinfj.  liy  Prnic^wir  J.  RiHHcil  Smith, 
of  the  I'liivcrsity  of  I'cnntylvaina.  !■«  one  of  the  tcrifs  oi  jirc- 
liminary  war  si  ulics  tiiulcrtakcn  In  the  I'.mlowmcnt.  the  tirst  of 
which  vvai  piililiihcd  in  Janiiat^,  1018.  Few  matter*  connected 
with  the  war  h..\e  attractcil  the  attention  of  the  public  of  the 
country,  and,  imieetl.  of  the  worUI.  in  recent  nmntht  «o  much 
a«  the  tiuestion  of  the  shippinR  supply.  The  dastanlly  jKilicy 
of  the  lni|KTial  Germaii  (iovertmient  in  sinking  all  -ihip'*.  vvith- 
I  ut  rcicrcncc  to  their  character  or  their  mission,  has  proved  so 
serious  a  menace  that  for  a  time  some  alarm  was  felt  a*  to  the 
ability  of  the  United  States  and  her  allies  to  find  sufficient  means 
of  trans|)ortation  for  men  and  k<>"<I'*-  When  the  (iuc%tio!i  l)e- 
ca.iic  a  pressing  one  for  us  we  turned  naturally  to  the  experi- 
ence of  our  I'ligli-'h  lirethren.  But  our  prol)lem  was  somewhat 
different  from  theirs,  for  the  reason  that  we  ili<l  not  have  the 
experience  and  facilities  on  so  lar^e  a  scale  as  had  (ireat  Uritain. 
Moreover,  it  seems  .js  if  nations,  like  individuals,  refuse  to  i)ene- 
fit  l>y  the  experience  of  others.  The  British  ( '.ovcrnnu-nl,  in  it.s 
attempts  to  stimulate  and  rcRulate  ship  pnMluction,  and  to  con- 
trol shippiiiR  in  the  general  interest,  made  many  blunders  \unch 
we  niinht  have  learned  from  her  experience  to  avoid.  For,  in 
spite  of  the  fact  that  Britain  is  a  shipping  nation,  we  find  in  the 
early  government  attempts  to  control  >hipping  some  such  igno- 
rance, some  such  blundering  and  some  such  inefficiency  as  have 
marked  our  own  conduct  in  the  maitcr. 

Professor  Smith  descril)es  and  explains  the  causes  of  our 
blundering  and  inefficiency  so  fully  that  it  is  not  necessar)  t.> 
say  much  atK)Ut  them  here.  .  -^eems  clear,  however,  to  a  ili.s- 
intercsted  observer  that  there  has  been  little  in  our  txperience 
during  the  past  year  in  connection  with  shipping  to  justifx-  u-  in 
thinking  that  governments  are  more  efficient  than  they  ever  were 

iii 


iv 


BWtott*  PurrACE 


„,  c.o.....n.ic  n,;utcf.:  -r  .hat  ihr  |.ul.lif  i..t.rr.t  .„,  .hr  ssh,Ac 
i.  aiM    Utt.T  Mrv.-.|  l.v    the  riuramr  -.f  thr  K-vrrimu-nt  u|h..i 
,lu-  MA  Ml  n..hi..r.al  a.t.MtN      Ucmilath.n  i>«r  K"N«'r«H"c..t  may 
un.Ur.akr    .um«iull>.   l'r"vi.U-.l    it    «i!l    have   ,^^rMu>^^   an.l 
,nu.;.K.-mc.H  t-  in.l.vi.l.iat  uudliKCur,  initiative  an.l  i>fitcri.ri«v 
|..,r  i-,  vcmincm  .!c|.arm.fnt.  tiuiM  vv-rk  I.n   tf.'iuTal  ntlc  at., 
.cural  rulr,  arc  ...l  a,.|.lual,k-  ...  the  .IcuiL  ..f  i.>«U.'try  an. 
cummer.        N-  n.-ri'  •■'r^tl'l'  ilt»'<raii'  «>  ..f  tlii^  cut.l  I*  f..m..» 
,1,,,,  ,h..  M.,rv  tnl.l  lA    IT..(c-..r  Smith  "i  an  miuUm  -l   the 
|;r,t„!,  cxi^rieme.  in  «hich.  I*caii*e  an  unlet   ha.l  l*m  i*»ue.l 
,ha.  ,hir  neare,.  cnm|.let.o..  >h.a,l.l  I*  .ih-I   f-r  the  m-.M  m.- 
„u-!i,.t.'  .ur.l.  a  ve.^el  cn^trmte.!  (-r  ..ne  purpu-e  sva«  Mrippe-l 
,,,  ,i„  U,.,.|  ,n  ..r.Ur  t..  nnke  an  -il  tanker,  while  .he  framesv-rk 
f..r  another  ve^^el  xva^  »n  an  a.ljaert.l  .lip  a.ul  tu-.-.le.l  -nlv  to 
have  the  eunMnuti-n  uu  i.  rwanl  f.  nuT.  the  lue.l      Ihi.  K-v- 
trnnu...  olVuiaU  thnu«h(  it  neee»ar>  t..  thn.w  away  all  the  laU.r 
a„,l  time  cn.iime.l  in  the  con*trHc.i..n  ..(  the  fir^t  ve,»el  in  ..r.ler 
to  f.ill.'W  a  Kciierat  rule  ,    ,■ 

T.i  U-  sure.  ..lie  iniKht  wish  f-r  Htr.mKcr  Kf-uml  for  l^lievinR 
i„  all  re^i-ects  in  the  eftkiency  ni  v.me  ..f  -nr  ^reat  I.UMnc** 
,„cn   it  that  mmh  latule.l  elV.ciency  i^  >een  .it  it.  I.e..  m  .he  ,,art« 
•hat  >..mc  ..f  them  have  taken  in  as>i.tin«  the  K"vernment  in  the 
a.lmini.trati..n  ..f  the  war.      Iheir  lailure.  however,  ho  far  a»  it 
has  nccurre.l.  mav  !«■  .hie  ...  the  laet  that  .hev  have  not  ha.l 
sntVu-unt  anthoritv.     Hut  whatever  the  cause,  it  is  certainly  true 
,l,,,t  we  have  ha-l'les^  success  than  wc  ex,H.-cte<l.  U-th  from  k-.v- 
crnment   intcrventi..n  an.l    from   the   i-articipatioii   ot    husines. 
U-a.ler^  in  government  afta.rs.     F..rtunately.  s-  far  as  shippuiR 
i.  o..uerne.l.  we  smn  at  las.  to  have  f..un.l  the  ri«ht  men    ami 
..resent  etVKiencv  in  shipl.uiUlin«  ha.  rest-.re.t  pal.lic  cntuletice 
in  ,1„>  matter.     It  U  m  he  hope.l  that  the  e<,uals  of  .Mr.  .Vhwah. 
Mr.   Ilurlev.  atui  their  coa.ljuf.r.  may  Ik.-   found  in  all  other 
li,us  of  ..nvernmeiU  hitMness  necessary  to  the  war. 

i)„e  ...  the  tnost  interesting  .piestions  connected  with  the  mat- 
ter of  shii.pin«  i^  the  policy  that  will  1*  folL.wed  after  the  war. 
Th*  savaKe  onslauRht  which  (iermany  has  made  on  the  tnde- 


Konou'i  rirrACK 


penilrncc  ..r  ilw  w.trl.f  prrfnccl  a»  it  »a*  »>>  l'>«K  c<>tiitntic«l 
rcLivmic  j-rtiriraii'n.  ha.  knl  manv  |«..|»lt  in  tlifferent  fumrif* 
!•>  ilitlarf  that  eafli  CMUittr\  mtft  I*  rtoii.rtitically  '^U-urtWmit 
aflcr  tin-  war;  ihai  iii-Mr  :ii;am  "■.hall  sse  .!i-|».»w!  "  MiH>ti  a 
(mumkh  I'ltwer  i'<T  ihinfc"  ttrfo.ary  fu  ttati<»iial  csi«trt>ec.  iUit 
no  cirtintrv  can.  in  tho  loiti;  run.  U-  cc..n.'niii-all>  'H-nrtWinK. 
\u  c'nuitry  can  I.  manily  *«•.  rxrcpJ  at  hiKh  0.1  .\..r  1*  »»urli  a 
rcviTMiin  In  exiu'iiic  nati.  itiMn  ilf.ir.ililr.  eiihcr  (r<>m  the  |>"tnt 
i)f  vifvv  iif  natinnai  <  r  intcrnaii-inal  ethic-,  or  m'  ititcriiati-tnal 
law  One  ..(  the  aim*  •>t'  the  prcent  war  i-  t-.  irre  the  tiati'-n* 
fn.m  .lander  <>(  .l-.nnii.itiHn.  eennninic  ><t  military.  With  th.it 
piirtH.^te  fiilly  aitaincil.  rc..n<rmii  •■  mination  need  not  !«  fearnl 
1  he  |iiir-uif  "i  a  |Kihey  .>i  »ti>n.>m!i-  iM,|ati<>n  l>y  the  nation*  after 
the  Will  vv.MiI.I  ilefeat  one  j>ur|h..e  >>i  the  war  I'hi*  -tatemcnt, 
of  cmtr-e.  ih-e-  not  niean  that  economic  pressure  may  ivt  l« 
JuMly  lirounhi  i)|h'ii  the  (  entral  Tower*  after  the  war  it.  in  a«l- 
ilition  to  their  military  <leieat.  it  1-  nece<»ary  to  n^e  Mich  prc*- 
!»ure  f 0  eihicate  them  up  to  the  moral  plane  if  the  re*t  of  the 
world. 

Three  line*  of  jiolicy  are  oi»en  ii  r  the  world  after  the  war. 
We  may  have,  a*  JH*l  intimated,  maritime  itulejiendcnce  on  the 
l»art  of  each  country,  under  Kovenmient  control  nr  Rovernmen' 
o|MTation;  or,  in  the  second  pLicc.  we  may  have  a  restoration  o 
the  iMiidition*  of  comjietitioii,  without  the  evil  feature*  i  |>o«>l- 
iiiK  and  nionojtoly  which  characterized  the  year*  licft.re  'Ik  var; 
or.  ill  the  third  place,  we  may  coiiceivalily  ha\e  a  pilicN  "  -nter- 
natii  nali-m  in  which  the  -hijiping  supply  <  e  svorM  '  ly  liy 
agreement  l»c  apportioticd  anions  the  nati'>n*  accordinR  i"  "ome 
principle  aRreeil  on. 

If  every  Kovcrnment  undertakes  to  aiil  shipliuildinj;  and  pro- 
motes shippinK.  which  latter  is  a  diflferent  thinjf.  there  will  surely 
he  a  supply  of  ships  far  in  excess  of  the  world's  needs.  What 
shall  he  <|one  with  the  surplus?  One  nation  wouUl  cut  prices  to 
drive  out  the  shijts  of  the  others.  The  result  would  be.  in  the 
loUK  run.  Ji  a  reduction  of  cost  of  shipping  to  shipiwrrs  at  the 
expense  of  the  general  public,  that  the  whole  plan  would  collapse. 


VI 


F.niTOR  S    PRF.FACE 


That  the  natitin^  can  reach  a  coiidu^iDii  uii  an  apportionment  of 
shipjiinj;  is  douhtinl.  'I'he  only  course  left  is  the  restoration  of 
shiphiiildinj,'  ami  >!ii|)piiifj  to  indivickia!  cntcrjirisc.  Some 
assistance  nia\  prnjicrly  he  ^iven  hy  governments  ))oth  to  sliip- 
luiiidini:.  aiKJ  tu  shi])  dpi-ratinn,  hut  such  assistance  .should  he 
fjiven  cither  I'or  present  or  ]ir'ispcctive  services  in  return.  And 
we  niu~t  not  t<irf,'et  that  we  may  he  f;;enerous  in  our  support 
of  >hi|ihuiMinj.;  and  yet  render  our  efforts  nugatory  hy  an  unwise 
jiolic>  concerning  sliip  operation. 

'ihe  author's  criticism  of  our  past  policy  appears  to  the  editor 
to  he.  on  tile  whole,  fair,  although  the  author  himself  must  of 
course  carry  the  responsihility  of  the  personal  judgment  which 
he  expresses  ahout  individual  officers.  It  must  he  home  in  mind 
m  all  criticisms  of  pul)lic  ofiticers.  especial!}'  army  and  navy 
officer-,  that  they  are  assigned  tre()uently  to  do  things  which 
they  themselves  do  not  feel  ahle  to  do  well.  The  editor  ha.s 
watched  with  some  care  the  ojicration  of  the  government  depart- 
ments as  they  have  expantled  under  the  pressure  of  war  for  more 
than  a  year.  1  have  found  little,  however,  to  encourage  my 
helief  in  the  advantage  of  government  management  of  husiness 
except  for  certain  routine  work,  or  in  the  wisdom  and  fairness 
even  of  government  control. 

D.WID    KiNLEY. 

Editor. 


FOREWORD 


Late  in  August,  1917,  I  was  asked  to  prepare  a  report  fnr 
the  Carnegie  Endowment  tor  International  Peace  showing  the 
"  effects  of  the  war  on  shipping  as  a  commercial  proposition, 
with  especial  reference  to  the  L'nited  States  and  (Jreat  Britain: 
giving  an  account  of  the  ship  shortage  antl  its  effects  on  rates 
and  profits;  the  efforts  of  the  different  countries  to  replace  the 
lost  ships:  the  proposals  for  new  kinds  of  ships,  such  as  the 
standard  ship ;  the  efforts  to  meet  the  shortage  by  increased  gov- 
ernmental control  such  as  the  taking  over  of  shipping  by  the 
British  and  American  Governments:  the  compulsory  and  volun- 
tary diversion  of  ships  from  one  trade  to  another,  the  transfer 
of  ships  from  flag  to  flag:  the  new  provisions  that  have  been 
made  to  meet  the  crisis  in  marine  insurance;  the  effect  of  the 
ship  shortage  and  the  taking  over  of  ships  on  imports  and  ex- 
ports— the  probable  loss  of  trade  routes  and  trade  and  the  absorj)- 
tion  of  trade  by  other  countries;  the  preparations  during  the  war 
for  shipping  expansion  after  the  war;  and  finally  whether  and  to 
what  extent  socialism  produced  by  the  war  will  be  permanent — 
a  question  on  which  the  shipping  administration  during  the  war 
has  much  bearing." 

This  has  proved  to  be  a  much  heavier  task  than  I  expected. 
For  example,  nearly  half  the  happenings  recorded  in  the  book 
have  occurred  since  I  began  it,  eight  months  ago.  It  is  so  close 
to  the  ^ .  jsent  moment  that  we  have  not  had  time  for  perspective 
to  develop  or  for  the  material  to  be  partly  worked  up.  Accord- 
ingly, the  record  has  had  to  be  gathered  in  most  scattered  places. 
Many  statistics  have  had  to  be  consulted.  All  this  has  been 
much  more  work  than  1  could  do  alone  in  the  time  at  my  dis- 
posal, and  I  am  therefore  indebted  to  others  for  much  help.  I 
am  especially  indebted  to  Mr.  John  E.  Orchard  of  the  University 
of  Pennsylvania  for  constant,  loyal  and  discriminating  assistance. 

vU 


vni 


FOREWORD 


TIr-  iliaptcrs  <m  Marine  Insi'rancc  and  Government  Aid  to  Ship- 
ping are  alnl^^t  entirely  his  work.  I  am  also  imlchtetl  to  Henri- 
etta Stewart  Smith  for  much  searching  for  material  anil  for 
critical  a.»istance  with  several  chajjters.  For  the  gathering  of 
material  in  cnnnectidn  with  the-  chapter  concerning  trade  I  am 
indehtcd  to  Mr.  \V.  1".  Warrington,  Miss  Erna  Grassmuck  and 
Miss  Mary  H.  Goodhne.  To  Mr.  Octaviu.s  Xarherth  of  Lloyd's 
Register  of  Shipping  I  am  indebted  for  much  advice  and  infor- 
mation. I  am  similarly  indebted  to  Mr.  O.  K.  Davis  of  \ew 
York.  I  wish  also  to  exjiress  my  appreciation  of  the  skilful 
assistance  of  my  .secretary.  Miss  .\nna  V.  .'^atterthwaite. 

Great  ctTort  has  been  made  for  the  desired  but  never  entirely 
attainable  accuracy.  This  bonk  is  one  which  by  the  nature  of 
its  preparation  should  make  an  appeal  for  the  clemency  >it  the 
future  critic.  It  is  written  in  the  midst  of  a  struggle.  .\s  I 
finish  it  the  Germans  are  making  their  terrifying  drives  toward 
Amiens,  and  there  is  serious  .\llied  talk  of  the  possibility  of 
German  occupation  of  Paris  and  the  Channel  ports.  In  this  book 
I  am  trviiig  to  state  and  explain  the  occurrences  of  the  first  part 
of  the  struggle,  so  that  we  may  the  better  understand  the  period 
that  is  to  follow.  Every  ])assing  month  gives  the  critic  a  gift 
of  new  fact  and  of  perspective  that  is  denied  the  author,  who  has 
undertaken  this  work  in  the  hope  that  it  may  do  a  little  to  increase 
the  understanding  of  one  of  the  many  phases  of  economic  activity 
with  which  our  government  must  deal  fur  (  ur  good  or  our  ill. 

J.  Russell  Smith. 
The  Unizrrsity  of  Pi-iinsyh\uiia, 
Philadelphia.  Pa.. 

iMav  SO,  I'JIS. 


CONTENTS 

(HAIIKK  fA'iE 

I  The  Organizatic  '  of  World  Shipping  before  the 

Clrcat   War    3 

II  The  World's  Shipping  Industry  during  the  War — 

Brief    Summary    with     Special     Emphasis    on 
Freight  Rates    26 

III  The  MfTects  of  the  War  on  Marine  Insurance  ....       49 

IV^        Trade   Dislocations  Due  to  War — Some   Possible 

Readjustments   74 

V  Government   Aid   to  Shipping    124 

\T        Co    rol  and  Operation  of  Shipping  by  the  British 

Government.  1914-1018   153 

\TI       Control  and  Operation  of  Shipping  by  the  United 

States  Go\ernment.  Iltl4-l!tl8   185 

\TII     Shipbuilding  during  the  War — Technical  Develop- 
ment          217 

IX  Shipbuilding  in  the  United  Kingdom   244 

X  Shipbuilding  in  the  United  States,  1914  to  May, 

1918 266 

XI  Shipping  Policy  after  the  Great  War  . 308 

XII  World    Shipping,    World    Organization,    World 

Peace      339 

Index   351 


INFLUENCE  OF  THE  GREAT  WAR 
UPON  SHIPPING 


CHAPTER  I 
The  Organization  of  World  Shipping  before  the  Great  War 


War  Destroys  the  Otn  Order 

The  wai"  ha-;  distroycd  the  daily  life  of  the  citizen,  put  him 
into  the  trenches,  Riving  him  an  entirely  different  routine  and 
rt'gitnen.  Similarly  lias  it  destroyed  a  wide  reaching  shipiiing 
orRaniiation,  and,  as  with  the  r.ien,  the  ships  themselves  have 
in  many  cases  been  destroyeil,  and  those  that  remain  are  in 
htrange  uses  or  strange  management,  or  Imth. 

The  management  of  the  world's  shipping  has  not  received 
enough  attention  from  students  of  industrial  organization  and 
social  j)hil(  suphy.  For  some  reason  economists  have,  in  times 
of  peace,  let  it  very  much  alone,  despite  the  fact  that  it  probably 
affords  an  unrivaled  example  for  the  testing  of  a  favorite 
piece  of  social  philosophy — the  doctrine  of  the  mainf,:iiance  of 
equality  through  the  maintenance  of  equality  of  opportunity. 
It  is  doubtful  if  there  is  to  be  found  anywhere  else  in  all  the 
world,  <jr  in  all  history,  so  good  an  opportunity  to  study  the 
workings  of  individualism  with  real  equality  of  opportunity  as 
the  commerce  of  the  sea  affords.  The  sea  is  always  there  It 
takes  care  of  itself.  Use  df^es  not  destroy  it.  No  one  own;;  it. 
In  times  of  jjcace  it  lies  open  to  all.  The  result  of  man'i  efforts 
in  this  arena  of  freedom  should  lie  of  great  interest  to  the  student 
of  society. 

It  is  true  that  the  prewar  organization  of  ocean  commerce  is 
gone,  for  a  time  at  least,  but  its  present  non-existence  should 
not  end  our  interest  in  it.  Even  during  the  period  of  the  Great 
War  the  organization  of  ocean  commerce  needs  to  be  studied 
in  retrospect,  because  of  the  necessity  of  some  kind  of  reorgani- 
zation that  must  follow  the  war.     When  the  military  struggle 

3 


4  iNH.i  KNii;  or   I  UK  «,Ki;\i    u  ah  in  in  smiitinc 

ends,  men  mil  Ii.im-  iuw  .in<l  greatly  enlarKc<l  ukus  ,<i  tlie  nMc 
that  ;;.>vtrmmiit  ina>  |)la_\.  <  KivcniiiU'nl-  fhi'iii>clvfs  will  Ik-  in 
cmpltti'  omtnl  ..t  tluir  ^Iiiiipinj-.  (icvcrnnii-nts  will  prubahly 
..wn  ..ntr!  lit  much  .>l  their  'hippin);.  Mime  of  their  >hip\anls 
;:iul  tnan\  nther  pni<liiitive  iniliist~ie>  Starvation  will  have 
tauKht  u>.  as  Ihm)!^  cnld  never  teach  -i-.  ti\e  llea^^^ity  m'  eom- 
imrie  and  our  ahxohite  depend-.-nee  upon  the  sea.  How  sliall  we 
or  the  po>twnr  world  ntili/e  these  ships?  Shall  we  reonstrnct 
the  old  system?  [!y  how  much  shall  we  vary?  In  any  dis- 
etivsion  of  this  reconstnirtion  we  need  first  to  have  a  picture 
of  the  organization  «jf  commerce  and  the  o|H-ration  of  the  world's 
shippinj,'  as  it  was  hefore  the  great  explosion. 


What  \\.\s  This  WoRt-n  Commercial  ORfiANizATioN  ? 

To  undcr.s..ind  it  we  must  api)reciate  the  importance  of  the 
hasc  fact:  namely,  that  in  times  of  peace  the  sea  is  free.  Any- 
Iiody  may  sail  his  ship  upon  it  wherever  he  will  or  can,  .\,.t 
only  is  this  world's  highway  toll-less,  hut  it  is  also  lighted  free 
of  charge,  and  is  carefully  surveyed  an<l  charted  that  the  -hips 
may  Ik;  safe  from  the  perils  of  nature.  Xavies  protect  it  from 
pirates.  They  hunt  out  derelict  vessels  and  blow  them  up.  f'ilots 
sail  far  out  from  shore  to  welcome  the  incgming  ship,  and  with 
their  special  knowledge  take  her  safely  into  port.  The  ports  hold 
out  an  almost  universal  welcome  to  the  ship.  I-'very  little  port 
wants  to  I)ecome  a  higger  port.  I-lvery  hig  port  want's  to  become 
a  metropolis.  They  all  strive  with  each  other  in  the  race  for 
lacihtics  that  may  bring  them  ships  and  commerce.  Millions 
nre  spent  digging  channels  through  which  the  ships  of  all  na- 
tiors  may  sail,  and  usually  free  of  all  C(jst.  into  the  welcoming 
harU)r.  If  there  are  any  charges  for  channels  and  harbors,  they 
are  alike  to  all  shipowners. 

Xot  only  are  the  natural  facilities  of  the  sea  and  the  artificial 
faculties  oi  the  harbor  alike  open  to  all  ships  of  the  world,  but 
the  organization  of  business  is  such  that  anyone  can  enter  it. 
It  is  no  more  ditticult.  requires  no  more  special  knowledge  to  own 


nur.ANizATiox  (IF  womtJ  siiirpivr.  BKroHi:  tmk  war       » 

a  frciRht  «lii|)  l'..r  hire  than  lo  own  a  hoiiM.-  for  rent.  The  tncthixl 
of  tunilmfitijj  th»-m  is  the  sinie.  N'on  own  y.iir  hoii>o.  or  your 
>hi|i  ill  lull  or  in  part,  suhject  to  iiartiiership  or  niortKage.  You 
turn  it  over  to  an  a^ent  for  the  hu''ine«s  of  ttndinf;  a  customer 
f'  r  it.  If  it  tt-akv  he  patches  it.  If  it  nee<!s  paint,  he  paints  it. 
If  it  needs  caretakers,  he  hires  them.  .After  a  certain  fieriiMJ  he 
turns  over  the  proi-eeils  to  the  owner.  Mere  indeed  i>  an  oppt.r- 
tiinity  for  the  golden  ajje  of  free  competition.  But  what  did 
wetiiid?  \\.  'ouikI  trusts,  ilu- lightest  kind  of  trusts.  Ik-tween 
tlistant  countries  we  found  ^roup.s  of  steamship  lines  that  divide 
the  trattic  hetwecn  each  other  to  the  hundredth  of  a  per  cent. 
They  maintained  uniform  rates  of  freight  with  almost  as  little 
variation  a.s  the  |»ost  office  maintain*  the  price  of  stamps.  Indeed 
they  succeeded  in  taking  to  themselves  the  trade  as  definitely  as 
if  it  had  Iicen  assigned  and  divided  amouf;  them  hy  .statute.  It 
has  liceii  divided  liy  statute— for  the  af;reenients  of  steamship 
lines  have  Iwen  the  law — even  the  printed  law— of  many  a  trade 
route. 

This  staiemcnt  (tf  the  astonishing  ahs-v-ncc  of  competition 
where  one  would  expect  to  find  freedom  of  competition  should 
not  he  taken  as  covering  the  whole  of  the  world's  trade.  This 
trade  is  of  two  kinds:  monopolistic  and  free.  It  is  carried  on 
in  two  ways,  the  line  of  steamers  operated  as  a  unit  and  the 
single  ship  ojierated  as  a  unit.  It  is  the  line  traffic  that  tends 
to  hcconie  monopolistic,  hut  in  addition  to  line  traffic  there  were 
in  times  of  peace  thousands  of  vessels  operating  independently, 
commonly  calle<l  tramps.  Those  -hips  were  for  hire  to  anvhociy 
who  could  send  a  shipload  at  one  time.  This  is  a  great  limita- 
tion to  the  freedom  of  the  trade.  The  necessity  of  shipping  a 
minimum  of  J.OOO  to  s.ooo  tons  reserves  the  tramp  to  special 
shippers  and  special  commodities.  Who  ever  heard  of  a  ship- 
load of  cotton  cloth,  or  of  hats,  or  shoes,  or  autos.  or  locomotives, 
or  freight  cars,  of  cutlery,  hooks,  playing  cards  and  musical  in- 
struments, of  cigarettes,  ready-made  clothing,  or  ostrich  feathers. 
of  lard,  bacon,  butter,  biscuits,  canned  salmon  or  copper?  These 
are  typical  commodities  of  that  very  long  list  of  things  that  must 


fl  INH.i  K\t>.    HI      (III     ..HIAI     \\\H    I  ION    SIMCnMS 

K"  III  Miiall  .|iuniiiu^.  ;»i)<l  thrrrlnrr  ran  »n>t  niak«'  ii>»-  >.i  tramp 
Mrrvicf  litil  iiiT.I  ihf  n-niilar  .U|^ii.|»-mi-  i.i  tin-  liiiv  .,t   vr.^cU 
oailifiK  I  III  nheiliilf  an«l  coinliiniii);  jn  ihrir  i-arj;.i  a  hun«lrc.l  or 
a  jIk.ikiiuI  i.r  (ivi-  thoii^aiHl   >mall   sliipnu-iiK  ..f  a-inrti-il  ma- 
UTiaU,     ShipiKT*  laii  avail  tlutiiH-hiH  ..i   tlu-  lr«-l>  i-..ni|»ttiiii; 
iramps  (.iil\  uilli  >;...,<|,  i.f  (r|-pat  quantity.  iiMiall>  raw  matfrialt 
■  i|  I..W  valiu-.     At  ^..mc  litiu-  nf  tin-  year  vnu  mn\  liii.l  mi  alnin-t 
vwry   .fa    .hip-*   I..a.|r<l    wiili   o.al.    imn   ,.rc,    nitrate   ..f    mmKi. 
uliiat.  cnrii.  ,ii);ar.  hitjiU'r.     Many  ..f  thesf  tratiip  cnmin.KliticH 
arc  ".t-aMinal  K""<I'.  Iiatnllol  in  ^-reat  i|iiantity  alti-r  harvest   in 
a  Irtisy  trade  that  tall>  a\va\  to  nothingness  a  lew  month,  later. 
Thus  the  Argentine  needs  one  hiii:dre.l  tramp  ship.  |)er  month 
in    N'ovemher.    I)eceml)er   an<l   January    to   take    her   mai/e   to 
!:iiro|H-.     DuriiiK  tlio.e  month,  she  imiM>rts  a  lar^e  part  of  her 
million,  of  lotn  of  coal,  which  come,  alnio.t  exclusively   from 
Wales.      To    successfully    operate    these    tramp    steamers    is    a 
jjreat  puzzle  in  applied  conunercial  i;eof;ra|)hy,     The  ^oal  of  the 
tramp  tnanajjer  is  to  keej)  his  vessel  always  loaded,  a  fact  which 
the  nature  of  trade  always  denies  to  .ome  of  them.     Therefore 
the  most  skilful  manat'er  keeps  his  vessel  loaded  as  nearly  all 
the  time  as  pos.il.jf.     ile  can  not  consider  a  single  voyage  alone. 
He  must  consider  the  ne.xt  and  the  next,     lie  prefers  to  sail 
from  Wales  to  Huenos  Aires  rather  than  t<.  I  ape   Town  Iwcause 
I  ape  Town  lack^  the  heavy  cargo  for  returt-      >yaKes,  so  that  the 
coal  .hip  from  tajjc  Town  must  often  go  m  search  of  cargo 
across  the  In.li.nn  Ocean  to  India,  or  the  .\tlantic  (X-ean  to  South 
America   hefore  her  captain   can   hear   the   welcome   sound   of 
freight  going  into  the  hold.     If  outbound  to  Australia,  she  may 
at  some  seasons  carry  coal  thence  across  the  wide  Pacific  to 
Chile,  and  load  there  with  nitrate  of  scnla  for  the  Xorth  .\tlantic. 
In  this  ocean  her  owners  would  much  prefer  to  <lischarge  at 
Savannah.  Ga..  than  at  London,  for  Savannah  has  cotton  and 
iumher  to  ship  to  Kurope,  whereas  hungry  London  has  nothing 
tor  the  tramp,  which  must  go  out  in  ballast,  while  the  liner  takes 
the  London  exjwrt  of  fine  manufactures 

Rather  than    fruitless  ballast,  any  owner   would  choose  to 


take  cual  at  U^^^.  ihait  cost,  ami  *>  ii  ha|ijwti!i  that  the  w>t\<\\ 
ci»al  in  tliMrilitiinl  a«  a  k'n«l  .if  liy-firiMluct  of  the  tramp  otcanu-r 
trartic.  aiitt  Mriiaiii  ii  it«  chief  »..urcv  i>i  >n|iply.  not  liccauMr  .>! 
«i|HTi.ir  quality  ..r  (|iiamil.\  ..f  her  cal.  f..r  in  l^.th  of  i.cm; 
rcpiits  .he  I,  the  inferior  of  the  l'nile.l  State-.,  !mt  l>eiau»e 
liritain  it  a  tretnen<loii<  iin|Mirter  of  i'.hmI  and  raw  inaierialv 
atiil.  as  her  t\|».iri  .if  inanniactnre»  i.  niuch  liRhter  lliati  the 
raw  imp..rts  phis  the  f.Mi.|,  ,1h-  h.t«.  live  or  m\  niilhon  tons  a 
month  of  emptv  »iiil(;oin|,'  shipn  \vht)»e  .iwncr*  arc  ^lad  t..  carry 
cal  at  a  n.nninal  price.  Since  the  Iniie.!  State,  i«,  an  exjMirtcr 
of  Imlky  material,  a  coal  ve->H-l  leavinj;  .lur  ■.h.ires  w.iul.l  have 
to  come  lack  in  iKiliast.  and  therefore  onr  ex|K)rt  coal  freiKlit- 
are  entirely  in  .liHproporti.m  to  |{riti>h  freights,  ami  our  r.".lc  a^t 
Coal  exporter  liears  n.i  pr.i|Mirti.in  to  mir  r.Me  as  cal  pr.Hluccr, 
our  cx|Mirt  in  ItM.'l  havinn;  lieen  :.'J.n(M>.(MHi  tons,  while  that  of 
I'nuIaiKl  wa-*  77,<Mit».(MH»  urns.  Yet  our  coal  pr.KJuction  wa» 
.several  times  larger  than  that  of  the  llritish  Isles. 

This  tramp  traflic  reflects  the  freetlom  of  the  sea.  It  in  com- 
petitive. lUit  this  fact  is  of  small  comfort  to  the  imjxirtinj; 
merchant  in  Rio  Jatieiro.  Ca|H;  Town.  MellM.urne,  Calcutta. 
Slianj;hai,  Lomlon.  or  New  V.irk.  whose  interest  lies  in  groceries, 
in  clothes,  in  manufactured  machinery,  or  that  wide  variety  ni 
things  handled  by  department  stores.  Handlers  of  this  class  of 
Koods  wish  to  jjet  a  few  drayloads  .if  lx)xes  and  hales  which  may 
comprise  altogether  a  hundred  varieties  of  goods.  They  are 
interested  in  the  ship  that  sticks  to  her  route  twelve  months  in  the 
year,  and  has  enough  sister  .shijis  t.>  make  a  good  schedule.  This 
lire  traffic  has  grown  up  since  the  period  of  the  tcamcr. 
Roughly,  it  is  the  creation  .if  a  half  century.  The  merchant's 
ship  of  an  earlier  day  gave  way  to  the  packet  ship,  and  the 
packet  shin  to  the  liner,  and  the  line  tratttc  has  heen  ever  in- 
creasing lioth  in  pr<ip.irtion  of  the  world's  trade  routes  that  it 
-satisfactorily  served,  and  in  the  frequency  atid  (juality  of  the 
service. 

.At  the  o|)ening  of  the  war.  Britain  had  appro.ximately  3,IM)0 
vessels  of  over  1,«()U  tons  each,  with  an  aggregate  gross  tonnage 


T.INHtlKMI    .,,,,,.,  „,      .....i '.         ♦«""*".     l..'»Nt    with 


r)»VKt.nt.MK>ir  or  Link  Tn^Kru- 

'!;:K':m;::::''rr:;,:;";\;r''';'''''^-'''^''»'->i.". 

I.    hull.,    (hi,,.,  „„  I   I  .       •  ***  ^'"^^  '"^''•«'  wiTi-  lirui 


l"allili.o.ui,fru',  o|-  \^v*u.ru  E 
wav  .111(1  Swi'ilin 


uropc.  ii.clii.li„jj  iH-imurk.  .N-.r- 


After  .„„.  |j,H.  !,.„  ».„.,|,|i,|„,,,  j,    ,^  .  . 

•HUT  .Icxrcl       Th..   ,,.„;"';.'•■'•  ^''''"  ""••  -  '"-'-^  •'- 

---•-••■"M".U':nir,::rrf:t\"'^''''^^^':^'''^-- 

'-  railn..-„N      |.-.  r  1      f  ^  ^\^'"''''""^-'-  "■  "u-  smK-  pl.c,. ,„,.„„„ 

'  II,- 1  ,,,„,,,,-,,.  (J  ^^^i^j  ,j^^_  J 


U'  r.iilr.iad  i»  a 

'■''1"      /,/,,/./„;•.   XowiMlxr  H.    1.^17. 


<>iii;\Nix\rii».N  Of  uoHifi  siMi'fiNii  Miirottr  Tiir,  y\\u        !» 

iwliirat  m..ii.t|M,|y.  ihai  rair  Mar*  can  tuA  I*  in|rrair<|.  ati.l  that 
ralci  mu't  I*  oinirnllnl  In  «t;iitiic 

Whilr  \Uc  »ra  ha^  l*rn  ir»T  f.  larrirri.  the  (act  that  m  one 
nwnwl  ii  hao  tcmlnl  to  put  it.  tra.le  l*vut.,|  ilu-  jiinMliiti.,n  uf 
any  r.Hintry.  e^fH-riallv  .m  the  .litTen-nt  tn.|.  ui  ira.lc  rMMtr» 
wcr^  M-tually  in  .liffcrrnt  ountripv  With  all  tin,  irw 
•|..m  the  laM  half  century  h.i«  «iihe.H-.|  the  crcaii..,,  u|)..n 
»t<  mul.ile  Mir!;ur  ..t  a  otuatinn  that  l«ar«  a  Mrikinj;  re*eml.lance 
t..  lr.HHj.oriali..n  l.v  lan.l.  ,..  that  I.y  the  U-|,Mtitiin|i;  .-l"  the  <  ,rcat 
War  the  n..rn.al  c..n.liti..i,  in  ..cean  line  ^ervue  the  u,.rl.l  uver 
wa  ne  of  aureement  anjotiK  line  carrier*.  U  hether  it  wan  in 
th*  \  r.  of  |!,e  Tr..|)ic  ..r  the  Arctic.  ..i  the  ( k-i  i.jeni  ur  the 
Orient,  the  tw.  ,,r  in..re  line*  cnuaKcl  in  the  <,nie  tra.le  ti.iialiv 
anree.1  a>  to  rate*.  *ailin|{s  etc..  alth-ni^.h  they  rniKl.t  o.m|)ete 
a>  tn  H-rvice.  an.l  their  aKreenienf,  nnuht  imm  time  •<)  time  Iw 
eiKle.!  I.>  (ierce  rate  war*,  to  U  f..lluvve.l  aKain  l.v  new  treatie* 
oi  |K-ace.  with  coalition*  more  or  le**  lavorahlc  to  the  *trung 
or  the  weak  memltcr*  of  the  comhine. 

The  Prnvntion  of  Competition  uilhiu  the  Croup 

flow  arc  the*c  Kroups  of  line*  kept  from  comfwting  with  each 
other  on  the  free  .*ca?     I  here  are  several  ways. 

h'citr. 

The  *im|)!est  mean*  of  control  is  fear  of  troul.le.  where  with- 
out an>  aRreement  whatever  the  *mail  companies  foIlo«  -he 
leaii.  «.  far  as  they  can.  of  the  l.iK  fellows  i„  the  same  service. 
'Micv  know  they  must.  ,.r  comiK.-tition  will  drive  them  off  the 
^cn^  lliis  form  of  agreement  of  action  mav.  hnwcver.  have  no 
Mi.^r.-  inrmality  and  ap| 'y  no  mure  rules  than  that  of  ai-  .Xnicri- 
'II.  express  company  which  has  rates  fur  a  certain  servire  that 
(i'lplicati- those  of  the  |)arce!  po^t. 

Formal  Aurcimcnts  as  to  Rales. 

(1).    F'ixal  nite  agreement..     In  several  of  the  X.rth  Atlantic 
aKreementN  such  as  to  the  iJaitic  <jr  the  Meditcrn.ic.in.  various 


!•• 


r\  I'M  i:\ii:  kk  tiii:  <;«i:.\t  war  ir'ov  siiii-imnt. 


iiK'tnliiT'  n\  till  cciiilfrriii.i'  aj^rco  hh  pri'scrihi'd  tariffs  wliicli  arc 
Miily  ihaiiyi'il  li\  imitnal  cniisent. 

I  -).  .Miiiiiiimn  rate  ■i;;ri'fim'nt>.  'l'lii>  is  tin-  ciitniiiini  dcvict- 
in  llu-  .ViTili  Atlaniii'  wlure  tlu'  cnciriiinii.-,  passfiifjcr  traftic  l)a^ 
lalkil  inici  iii'iii;;  a  tli'ft  of  t'rcij^'lit  and  jia-si'iij^'fr  carryiny; 
sicainir>  tliat  liavc  imii-li  iiKirc  Ircij^ht  ca])acit\  tiian  can  he  usc<l 
in  ni  rmai  limc>.  even  in  the  directiim  of  j^'reatcst  freight  innve- 
iiunt.  wiiich  is  east  liniind.  Here,  tlien,  in  tliis  cinptv  space  was 
tlie  inn-t  iiressin-;  necessity  tor  snme  kind  of  aRrccniein.  Since 
i1h'>  can  not  all  },'ft  cnou^'h  freijjlit  even  hy  competition  the 
cnipanio  have  a),'reed  that  they  will  nut  take  it  helow  a  certain 
niininuini.  which  rate  is  usually  the  actual  rate,  krause  of  the 
impossibility  of  K^ttinj,'  any  hijjher  rate  when  there  is  so  much 
unused  >pace  sailinj^  every  day  or  two. 

( •"!  I  Differential  rate  aj^reements.  in  some  services  some 
lines  have  >lo\ver  steamers  than  the  others  and  are  allowed 
to  take  Irei},dn  at  a  lower  rate  hecau.se  of  that  fact.  Here  again 
we  find  an  exact  duplicate  of  the  freight  differentials  that  have 
long  existed  between  Chicago  and  North  Atl  .ntic  ports,  from 
.Vewpnrt  News  to  Hoston. 


Diiision  of   Territory. 

Many  of  these  agreements  provide  that  one  companv  shall 
serve  certain  ports,  and  that  other  coinpanies  shall  let  these 
ports  entirely  alone,  and  have  for  their  own  exclusive  use 
certain  other  ports.  Thus  the  Hamburg-American  runs  to  Ham- 
burg, and  the  North  (ierman  Lloyd  to  IJremen.  and  as  a  result 
of  a  recent  rearrangement  of  a  conference,  Hamburg-American 
Lines  withdrew  their  N'.'w  (.ileans  .service,  leaving  that  trade 
to  be  served  by  the  I'ritish  lines  of  Lamport  and  Holt,  and  the 
I'rince  Line.  Such  division  of  territory  works  to  good  advan- 
tage on  a  coast  with  inan\-  jxirts  like  the  west  coast  of  South 
America,  in  which  many  small  ports  are  arranged  in  a  long 
string  so  that  it  is  a  great  advantage  to  all  concerned  if  the 
vessels  of  one  line  will  call  at  some  ])orts.  and  those  of  other 
lines  at  the  remaining  ports,  thus  giving  a  faster  service  to  all. 


^.1 


(•K(;\MZATI(i\    ()!■     WOKLl)    SIIII'IMNC    IlKFOKK    TlIK    \\  M< 


II 


Dh'i.ii«it  of  I  lie  Traffic. 

{  1  ).  I!y  restrictiiij,'  the  number  of  sailings  on  the  |)art  of 
each  line.  A  jjood  example  of  this  is  furnished  by  the  aRreenieiu 
as  to  the  American-iJrazilian  trade  by  which  the  Lamport  and 
Holt  Line  was  allowed  annually  twenty-four  sailings  from  New 
York;  the  Prince  Line  twenty-four  sailings;  the  Hamburg- 
American  Line  twenty-four  sailings,  while  returning  to  America 
allotments  were  as  follows.  Hamburg-American,  twenty-four 
sailings  to  New  ^■ork;  Prince  Line,  twenty-four  to  New 
York,  twelve  to  New  Orleans;  and  the  Lamport  and  Holt 
Line,  with  the  lion's  share,  as  many  as  might  suit  its  conven- 
ience. 

This  American-Brazilian  conference,  with  seventy-two  sailings 
a  year  from  Xew  York,  is  an  interesting  fact  to  keep  in  mind 
the  next  time  some  one  is  heard  to  announce  that  we  have  or  had 
no  lines  to  Brazil.  In  the  general  ignorance  which  prevails  con- 
cerning ocean  transportation  this  particular  statement,  for  which 
there  has  been  no  basis  in  fact,  for  several  decades  has  repeat- 
edly found  itself  in  all  kinds  of  places,  including  the  Con- 
l^rcssiomil  Record  and  serious  economic  discussion.  It  seems 
to  have  been  part  of  the  general  mythology  which  in  the  .\mer- 
ican  mind  surrounds  shipping.  This  agreement  for  the  seventy- 
two  sailings  was  signed  February  14,  I'.tos,  and  was  the  treaty  of 
peace  that  ended  an  expensive  rate  war  that  had  made  all  parties 
lose  monev  for  a  vear. 


Poflliny  the  Freiyht  Money. 

This  rather  common  device  sometimes  covers  the  total  income, 
somi'iimes  a  part  of  the  income.  Sometimes  it  is  only  used  as 
an  .-idjustnient  to  balance  up  the  proportion  of  traffic  which  was 
allotted  in  advance  to  eacli  line  of  the  conference.  Thus  it  was 
applied  to  a  Xorth  Atlantic  steerage  passenger  traffic  agreement 
in  such  a  way  that  any  company  carrying  more  than  its  agreed 
upon  share  should  pay  to  the  other  companies  seventy-tive  francs 
for  each  excess  passenger.  At  other  times  the  s:;me  result  is 
obtained  by  raising  the  rates  the  moment  that  the  companv's 


1: 


i\Ki.ri:.\ci:  ok  tiik  ckkat  \v.\u  ii'un   smi-i'iNn 


qimtii  has  hccn  nhtained.    This  automatically  shunts  the  traffic  to 
other  lines. 

All  iiitorcstinj,'  example  of  agreement  between  lines  was  that 
of  January.  ]!•(».'>,  l)etween  the  North  (iernian  Lloyd  and  allied 
lines  nil  the  one  hand,  and  the  French  lines  on  the  other.  The 
lines  divided  among  themselves  '  the  entire  third  clas.s  passenger 
iratlic  from  ports  between  Cronstadt  and  JJordeaux,  both  in- 
cluded, to  the  ports  in  L'nited  States  and  Canada,  ft  was  to 
be  divided  between  the  two  groups  in  proportion  to  the  num- 
bers they  carried  during  the  years  1!»0()  to  l'.H)i',  inclusive. 

Ki-t-fiii(/  i/Ktin  Competition  of  Carriers  Outside  the  Conference 

The  above  mentioned  methods  of  controlling  competition  all 
refer  to  those  lines  that  have  established  ])laces  in  the  agreement. 
But  how  shall  these  agreeing  members  keep  outsiders  from  com- 
peting with  them?     There  are  several  means. 

ill).  The  deferred  rebate  is  one  of  the  most  widely  used  and 
effective  means  of  making  the  shipper  let  rival  lines  alone. 
Carriers  make  an  agreement  with  the  shipper,  promising  to  re- 
turn to  him  .".  or  Id  per  cent  rebate  of  the  freight  he  pays,  pro- 
viding he  ships  by  no  other  than  conference  lines.  The  rebates 
are  calculated  for  a  |)eriod  of  three,  six,  or  even  twelve  months. 
They  are  held  for  six  months  more  before  being  paid,  .so  that 

'  "  In  addition  to  many  other  details,  the  agreement  provides,  in  article  10, 
that— 

Ihe  port  of  Havre  is  especially  reserved,  both  for  freight  and  passenger 
business,  by  direct  line  to  and  from  the  United  States  and  Canada,  to  ihe 
Transatlanti<|iK'.  All  other  I'rciich  Atlantic  ;ind  Channel  ports,  with  the 
exception  of  Cherbourg  and  Doulogne.  will  be  also  reserved  to  the  1  rai's- 
atlaiiti<|ue.  but  only  as  tar  as  passenger  business  by  direct  line  to  and  from 
the  United  States  ano  Canada  is  concerned. 

Article  II  stipulates  that  — 

rhe  rransatlanti(|ne  binds  herself  not  to  call  at  any  port  between  Cron- 
stadt and  I'rench  frontier,  either  for  freight  or  passenger  business,  except 
with  the  previous  consent  oi  the  N.  D.  L.  \'.  lines. 

Article  12  provides  that  — 

I'a-sengers  from  Scaiuliiiavia  and  I-'inland  shall  not  be  considered  in  any 
way  in  this  contract,  and  the  Transatlantique  shall  not  engage  passengers  in 
these  countries." 

S.  S.  Hnebner,  Rcpnti  ,in  Steamship  Agrccimiits  and  Affil'miiiins  in  the 
American  horeinn  and  Ihimrxlic  Trad,'.  i()i I.  vol.  4.  pp.  29-30.  U.  S.  House 
(if  Kepresentatives,  6.id  Cong.,  Committee  on  .Merchant  .Marine  and  Fisheries. 
1  his  book  IS  an  invaluable  storehouse  of  accurate  information. 


ORC.AMZATIOX    OF    WORLD    SHIPPING    nEFORE    TIIK    WAR 


i:! 


tlic  carriers  always  have  a  club  (deferred  rebates)  ove^  the 
bead  nf  the  shipper.  He  forfeits  this  rebate  money  if  he  ships 
even  one  box  of  matches  by  a  rival  line.  Naturally  this  Kind 
(if  control  is  more  effective  in  the  long  lines  of  service  like 
that  from  Xew  York  to  .Africa  and  .\ustralia  than  in  short  lines, 
because  of  the  greater  difficulty  oi  the  rival  line  offering  adecjuate 
service.  If  a  shipper  gets  at  outs  with  the  conference  carriers, 
he  may  Ik  at  their  mercy,  and  the  rival  who  tries  to  break  in 
has  great  difficulty  in  offering  as  good  service  as  the  existing 
conference  lines  together  can  give,  so  the  position  of  the  lines  is 
strong. 

(b).  Fij:  .ting  ships  are  the  most  easily  effective  means 
whereby  the  conference  beats  (jff  the  rival  who  tries  to  get  in. 
The  Germans  have  perha])s  carried  this  thing  to  a  greater  degree 
of  organization  than  any  cjther  nation,  in  that  six  German  com- 
panies formed  a  corporation  known  as  a  fighting  corporation, 
which  owned  four  s)iiall  steamships  and  chartered  others  as 
occasion  arose.  If  a  rhvl  started  a  competing  service  to  any 
of  the  conference  lines,  the  fighting  corporation's  ship  came 
alongside,  announced  the  same  sailing  day.  the  same  ports  and 
proceeded  to  cut  rates  far  beyond  the  limit  of  profit. 

I  remember  as  a  small  boy  reading  with  wide  stretched  eyes 
a  highly  colcjred  account  of  a  combat  between  a  diver  and  an 
octopus.  The  huge  eight-armed  monster  of  the  deep  read;*' i 
out  one  arm  and  seized  the  diver's  right  wrist.  With  a  second 
arm  he  seized  the  diver's  left  wrist.  With  the  third  arm  he 
throttled  him,  and  still  had  five  arms  left  to  hold  tight  to  the 
sunken  wreck,  while  he  strangled  the  diver.  In  this  fighting 
.ship  of  the  six  great  German  corporations  we  see  an  exact  dupli- 
cate of  the  many-armed  octopus.  The  six  great  companies 
could  easily  afford  to  lose  on  the  little  fighting  corporation, 
which  would  kill  one  aspiring  ri%-al  after  another,  while  between 
times  its  ships  would  be  chartered  out  on  short  time  charters 
on  jirofitable  work  if  there  was  any,  or  even  chartered  by  some 
of  the  various  lines  that  owned  the  fighting  corporation.  The 
fact  that  the  free  sea  can  produce  such  tight  shipping  trusts 


14 


i.vKUKMi:  iiK   rriK  ckkat  war  iton  .iinrriNG 


cxp'ains  the  great  alxonce  of  t(>reij;n  shippinR  lines  from  dcr- 
man  jjnrts,  ami  the  wide  reach  of  the  (ierniaii  shijjpiiig  lines  over 
all  oceans. 

The  two  leading,'  German  companies.  Hamburg-American  and 
North  Cicrnian  l.loyd,  in  giiaiding  their  territory  from  com- 
petition, ha\e  not  only  driven  and  kept  rivals  away  from  their 
own  ports,  but  for  the  last  forty  years  the  establishment  of 
services  to  Scandinavia,  except  by  Scandinavians,  has  been  re- 
garded as  undue  and  unpermissible  encroachment,  because  it 
might  carry  directly  the  goods  handled  by  transshipment  through 
Hamburg  and  iJremen,  especially   Hamburg. 

(c).  Long  time  contracts  with  shippers  serve  to  hold  their 
trade  during  the  existence  of  the  contract. 

(</).  Contracts  with  railroad  companies  are  very  common  in 
the  .\nicrican  trade,  and  their  object  is  usually  to  put  the  trade 
brought  by  a  certain  railroatl  from  a  certain  region  into  the 
hands  of  certain  steamship  companies.' 

Despite  all  the  methods  of  scaring  away  the  outsider,  rate 
wars  have  been  conmion  occurrences.  Like  the  initial  price  of 
ships  so  the  cost  of  a  rate  war  was  a  part  of  the  cost  of  getting 
established  in  business — a  kind  of  initiation  fee  that  often 
amounts  to  a  million  or  more.''  It  can,  however,  Ije  safely  said 
that  with  the  sea  as  with  the  land,  the  rate  war  has  declined  in 
frequency  in  recent  years,  due  to  th.  increasing  thoroughness 
and  rigidity  of  the  organization  of  land  and  ocean  carrying. 


'  "Judged  from  tluir  wordiiiR  most  of  the  agreements  have  brouRlU  about 
a  close  preferential  alliance  l)etwecn  vast  railway  systems.  controllinR  the 
tratiic  (if  larKe  sections  in  the  interior  of  the  United  States,  and  important 
conference  steamship  lines,  which  is  hound  to  prove  a  powerful  aid  to 
the  preferred  water  carrier  as  compared  with  any  independent  line  not  thus 
allied." 

S.  S.  Huebner.  o/>.  cil.,  vol.  4.  p.  293. 

'  "  .Moreover,  the  federated  lines  can  conduct  the  competitive  struggle  with 
the  cnmfortable  assurance  that,  following  the  retirement  of  the  competing 
liTie.  thev  are  in  a  position  to  reimburse  themselves  thru  an  increase  m 
ratt-i.  To  allow  the  existence  of  conferences,  therefore,  generally  means 
giving  the  trade  to  the  lines  now  enjoying  it.  Only  a  powerful  line  can  hope 
to  fight  its  way  into  the  trade,  and  witli  the  inevitable  result,  if  successful, 
that  it  will  joni  the  combination  or  be  allowed  to  exist  bv  virtue  of  some 
rate  understanding.  " 

S.  S.  Huebner,  nf.  c:l..  vol.  4,  pp.  ,W-30S. 


()R(;\MZ\TI()\    on    WORLD   SUH'tMNi;    BEFORE    TIIE    WAR  i r» 

Informal  At/rccmcnts. 

I'lrhaji'^  thi-  most  siiKp;cstive  tiling  in  tlie  whole  list  of  lines 
relations  i>  the  docnmentlcss,  even  wurdless.  agreement  that 
works  so  surprisingly  well. 


Reference  should  here  Ik;  made  (1)  to  the  tendency 
toward  oral  understandings,  instead  of  written  agreements, 
hetween  the  lines  operating  to  and  from  ports  of  tlie  United 
States,  and  (2)  the  care  which  has  been  exercised  to  pre- 
vent agreements  and  understandings  from  becoming  public. 
While  not  involving  as  strong  a  moral  obligation  as  written 
agreements,  the  evidence  shows  that  for  all  practical  purposes 
oral  arrangements  are  ipiite  as  effective.  Judging  from  the 
manner  in  which  the  lines  observe  the  same,  the  existing 
oral  understandings  give  uimiistakable  evidence  of  the  high 
order  of  integrity  prevailing  in  modern  business,  and  justify 
fully  the  i)hrase  "  gentlemen's  agreements."  Written  agree- 
ments seem  to  have  accomplished  their  purpose  in  many 
cases  and  are  apparently  no  longer  needed.  The  lines  in 
some  instances  need  not  even  meet  in  conference;  they  may 
avoid  every  appearance  and  every  act  which  would  seem  to 
show  the  existence  of  an  agreement  or  understanding;  and 
yet  operate  in  the  same  spirit  of  harmony  that  would  i)re- 
vail  if  a  written  agreement  existed.  There  is  still  friendly 
rivalry  in  procuring  business,  but  this  business  is  secured 
at  not  less  than  certain  understood  rates.  Again,  in  nearly 
all  of  the  few  trades  where  agreements  or  understandings 
have  been  denied  by  all  the  interested  lines,  a  remarkable 
uniformity  in  rates  seems  to  exist  and  not  a  trace  of  a  rate 
war  can  be  found.  The  situation  has  been  explained  to  the 
committee  as  one  of  "  following  the  leader,"  the  dominant 
carrier  fixing  the  rates  and  the  less  important  lines  adopt- 
ing these  rates,  they  being  allowed  to  exist  in  the  trade  with- 
out having  an  effective  fight  waged  against  them,  as  long 
as  they  conform  to  the  rates  and  conditions  established  by 
the  dominant  carrier. 

Where  written  agreements  govern  the  rates  and  methods 
of  the  lines,  the  terms  of  the  agreements  have  been  guarded 
with  the  utmost  secrecv.' 


I 


'S.  S.  IliicbiitT.  (I/'.  11/..  vol.  4.  pp.  293-294. 


10 


INFI-rENCE   OF   TIIF.   f.RKAT    WAR    (PON    SHIPriNO 


rerhaps  the  fnrcc  of  these  undersf-nditiKS  tniRht  in^teatl  have 
l)eeti  pointed  nut  as  an  evidence  of  tlie  j^reat  losses  that  occurred 
from  rate  wars. 

Siicii  in  hrief  was  the  condition  of  competititm  npon  the  free 
.sea  at  the  IjOf-iiniin^j  of  the  (ireat  War.  'I'liese  shippitif,'  or>;aniza- 
tioiis  were  amoii^  the  nmst  international  of  man's  atVairs.  The 
fact  that  the  sea  is  free  meant  that  the  shipping  comhine  could 
sail  all  sea>  and  reach  the  ports  of  all  wortlnvhiie  lands.  Few 
thiiifjs  could  lietter  illustrate  the  supreme  iiiternationality  of  the 
sea  and  its  trade  than  the  fleets  of  Norwegian  l>anana  hoats  ply- 
injj  between  the  United  States  and  the  Caribbean,  or  the  Kng- 
li.sh  and  (ierman  lines  fighting  each  other  almost  to  the  death 
for  the  privilege  of  carrying  the  trade  between  United  States 
and  Hrazil.  and  then  when  the  struggle  ended  dividing  the  trade 
up  among  themselves  with  mathematical  e.xactness. 

OiR  Attitude  toward  Shifping  Agreements 

It  is  probablv  true  that  the  average  American  has  a  sense  oi 
opposition  to  this  wide  reaching  and  well-nigh  universal  shipping 
C(jntrol  by  agreement.  Yet  a  further  examination  shows  that 
in  a  way  it  helps  to  bring  to  pass  a  condition  for  which  many 
of  us  have  a  prejudice:  namely,  the  condition  of  the  survival  of 
many  small  units  rather  than  the  creation  of  one  large  unit,  for 
it  is  a  fact  that  the  rate  agreement  keeps  the  small  carrier  alive, 
whereas  competition  means  monopoly  through  the  elimination 
f  the  weakest. 


Attitidf.  ok  the  Shippers  toward  Shipping  Agreements 

The  attitude  of  the  shippers  in  line  traffic  is  less  venomous  to 
conferences  than  we  nii^ht  at  first  expect.  The  conference  rates 
are  stable  rates,  and  stability  of  rates  is  very  important  for  the 
<ievel(jpment  of  the  export  trade  in  which  men  have  to  (juote 
prices  for  goods  delivered  at  future  dates.  During  a  period  of 
competition  the  exporter  is  continually  receiving  complaints  from 
his  customers  in  foreign  countries  because  one  man  gets  goods 


ORG»NIZATION    OF    \VORLr>   SHIPPING    BEFORE    THE    WAR 


17 


from  this  week's  steamer  at  a  certain  price  and  the  rate  on  his 
rival's  rockIs  on  next  week's  steamer  may  In:  lower  and  the 
ciisti>mer  objects  to  his  rival  getting  this  low  price.  The  con- 
ference places  alt  shippers  on  the  same  basis,  just  as  the  public 
railway  rate  of  A  nerica  when  adhered  to  puts  us  on  the  same 
basis  and  gives  none  of  us  the  advantage  of  a  railway  reiiate. 
Many  ocean  shippers  aver  they  would  prefer  high  uniform  rates 
for  all  rather  than  low  but  tUictuating  rates.  The  peacefully 
workinj,'  conference  gives  a  much  better  distribution  of  sailing 
days  than  three  or  four  warring  lines  which  may  send  oflF  thn-e 
competing  steamers  on  the  same  Saturday  and  then  none  for  a 
fortnight. 


The  Necessity  of  Gover.vment  Interfer?;nce 

Despite  these  advantages  to  the  shipper  the  agreements  of 
carriers  produced  a  situation  fraught  with  problems — a  condi- 
.ti<^n  that  democratic  legislatures  did  not  look  upon  with  favor. 
The  control  of  world  shipping  was  rapidly  working  around  to 
the  place  where  governments  would  have  had  to  take  some 
.-iction  ^or  the  protection  of  individuals.  The  competitive  system 
had  largely  ended,  so  far  as  line  traffic  was  concerned,  and  one 
need  look  no  further  than  the  iiistoric  facts  of  human  nature  to 
know  that  seeds  of  trouble  lay  in  the  secret  monopolies,  under 
the  name  of  shipping  conferences,  that  practically  encircled  the 
world.  These  conferences  were  in  the  nature  of  a  monopoly, 
and  one  need  scarcely  cite  history  to  prove  that  monopoly,  carry- 
ing unlimited  authority,  is  one  of  the  tilings  that  the  human 
l)ein,s,'  is  incapable  of  using  humanely.  So  much  power  turns  his 
head,  and  it  has  Ijeen  found  to  do  so  in  all  ages  and  in  all  climes, 
whether  in  ancient  Egypt,  modern  Me.xico,  Germany  or  New 
York.  The  shipping  conference  has  many  advantages,  but  even 
in  times  of  congressional  investigation,  shippers  are  loath  to  com- 
plain,' for  fear  of  some  form  of  retaliation.  Occasionally  one 
can  be  found  to  speak  out  and  say  that  carriers  have  become  un- 

'  S.  S.  Huebner.  o/>.  cit..  vol.  4,  pp.  309-314. 


1* 


IM'I.I  i:\(  K   III'    Till-:   r.RKAT    W  \R    IPOX    SMIITINO 


rea-MMialily  >l  ■«  in  M-ttlinp  damage  claims,  unrcasntialily  care- 
less in  t'rx  handling  nt  ^J'mmIs,  that  tlicv  ailvancc  rate-,  witlnnit 
due  notice.  Slii|)|iir>  claimed  that  mice  the  authorit)  oi  car- 
ruT>  i-  iin(|iiesti<'iicd.  it  is  apt  ti>  develop  intu  unfair  favnritiMU 
for  -ome  lar>,'e  ciirp-ratiun  or  friend,  to  the  detriment  of  ntlicr 
shipper>.  lixhau^tive  investigations  made  hy  a  conunittec  of 
Coiijjre'-i  in  H'll'  show  conclusively  that  it  is  \vi<lely  lielieved 
l)y  those  in  a  jKJsition  to  know  that  some  form  of  (j;o\ernment 
aid  is  necessary  to  protect  the  individual  from  this  strong;  or- 
ganization of  carriers,  and  the  analogy  hctween  railroad-*  and 
«!iips  is  carried  out  by  the  uniformity  with  which  these  recom- 
inendation>  refer  to  the  sulTiciency  of  imhlicity.  It  will  he  re- 
memhcred  that  railroad  control  U-gan  first  by  public  rates,  then 
by  rate  regulation,  and  we  are  now  moving  rapi<lly  tow;M<l 
jTovcrnnient  ownershij).  The  analogy  with  shipping  is  striking. 
When  the  war  is  over,  the  history  of  prewar  conditions  must 
form  tlic  background  of  the  irtp'ligent  settling  of  the  questions 
that  will  arise  in  the  reorganization  of  the  world's  carrying 
trade. 


Ocean   Freight   Rates 

The  story  of  the  combination  of  line  carriers  is  not  yet  all 
told,  (^ce.'in  rates  must  l)e  understood.  In  this  respect  we  can 
not  understand  line  traffic  and  its  rates  until  we  understand  the 
tramp  traffic  and  its  rates.  In  the  tramp  traffic  where  the  single 
.ship  is  operated  independently  on  the  absolutely  free  highway 
of  the  world,  we  do  really  finil  the  competitive  rate  giving  us  a 
full-Hedged  example  of  that  freedom  which  we  would  theoreti- 
cally expect. 

I  f  freight  is  scarce,  the  ships  compete  for  it,  and  down  go  the 
rates.  If  ships  are  scarce,  the  shippers  compete  for  them,  and 
up  go  the  rates.  The  term  "semi-piratical,"  as  applied  to  the 
sl)i|)])ing  business  by  one  of  its  own  devotees,  is  not  entirely  un- 
iiR-rited ;  for  there  is  in  the  tramp  traffic  no  shadow  of  that 

'  S.  S.  lliubiifr,  ,./'.  iit..  vol.  4.  pp.  309-314. 


(mr.AN-IZATIiiN    (IK    WORLD    SHU-PINO    nr.KORK    THE    WAR         19 

!.hil)Ii<<Icth  nt  tlu-  land,  namely,  a  fair  and  rca-^onalde  rate.  If 
shi|)>  are  pleiits,  they  are  iiiea|).  the  rale  ^oe-.  down.  down,  down 
to  the  point  of  o|HTation  at  cost,  which  may  lie  said  to  inelmle 
wageH,  maintenance,  dejireciation.  overhead  charge,  and  reason- 
able interest.  The  rates  will  ^o  down  until  there  i*  no  nvmey 
for  intere-t,  no  money  for  depreciation,  lometimes  even  no  money 
for  maintenance;  for  it  seems  to  lie  well  estahlished  that  there 
have  lieen  loiiK  period*  when  >hip*  have  lieeii  oja-rated  at  a  de.ul 
loss,  the  only  linut  lieinj;  the  decision  of  the  carrier  to  tie  up 
his  ships  rather  than  take  the  existing  rate.  On  the  other  hand 
the  present  war  has  >hown  aRain  the  well  estalilished  fact  that 
the  carrier  al>o  knows  no  limit  when  he  gets  the  shipiier  on  the 
hip.  Kates  will  ro  up,  doubling,  triplinR,  (|uadrupling.  (|uintu- 
plinp.  until  the  limit  is  the  absolute  inability  of  shippers  to  pay. 

Perhaps  someone  asks  why  the  tramp  ship  owners  do  not  com- 
bine when  rates  R»'t  so  low.  The  answer  is  that  the  temptation  to 
stay  out  of  the  combination  and  reap  the  advantages  rather  than 
stay  in  it  aiul  pay  the  cost  is  too  great  for  human  nature,  espe- 
cially when  that  human  nature  lives  in  such  ditTerent  and  far 
separated  breasts  as  those  of  the  Japanese.  Hindu,  (ircek.  Nor- 
wegian, (ierman,  Englishman  or  American.  The  I'arliament 
of  man  is  simpler  than  this.  Supjwse  the  world  needs  s:,  per 
cent  of  the  existing  shipping,  and  suppose  !tO  per  cent  of  the 
existing  shipowners  •>gree  to  combine  for  a  certain  rate  or  tie 
up  their  ships.  It  should  be  a  profitable  rate,  or  it  is  scarcely 
werth  doing.  The  10  per  cent  of  outside  shippers  would  cut 
1  per  cent  under  it,  and  be  as  busy  as  they  could  be  while  the 
agreeing  shipi)ers  would  have  15  per  cent  of  the  world's  ship- 
ping idle  on  their  hands.  The  picture  of  an  agreed  upon  rate 
sets  the  tramp  ship  owners  talking  in  every  depression:  but  the 
facts  of  free  competition  have  always  kept  them  from  attaining 
any  substantial  result  in  the  various  feeble  attempts  at  rate 
combination  that  they  have  attempted.' 


'See  J.  Russell  Smith;  Ocean  Carrier,  pp.  235-255,  for  discussion  of 
theory  and  history  of  attempts  at  rate  control.  Also  Fairplay.  London, 
I  sbruary  and  June.  1914. 


i?rt 


INH.t'K.XlK    Of   TIIK   liKKAT    W \H    IPON    MllirpiNn 


l'|Hin  till'  uh.ilf,  tr:ini|i  irafiic  liail  tiDt  ken  |)artkiil;irly  pnifit- 
:ililc'  l<ir  the  ten  Mar-  U'tMrf  tlu-  <ireat  War.  I'rcmi  |>«{»!t  t.i  I'.Mil. 
the  slii|i..\Mur-.  hail  a  K"l'li'i"  ;tp".  the  jHrriixl  .it  the  lUifr  War, 
whrti  llritaiii,  lunihutin^'  a  catii|)aiKii  •■.•mmi  tiiilc!i  ir«»iii  hnme, 
iiceilf<l  Iar;;i-  ijiiaiitifii-  m|  ,lii|.|iiii^'  aii<l  to.  k  it,  tiiakiii);  a  vanity 
that  «»iit  rati-  »<iariiij;  The  f\i<rliilaiit  pMfit".  nt  the  uvmut* 
raiivi'il  iii..riiiiiii-.  l.tiil.Hiij;  of  w\\  -hip-,  which  camr  »\Hm  llit 
Ma  111  I;«i|  an.l  I'MfJ  at  tin-  onu-  tiiiit-  that  the  eii.l  ..I  the  war 
eaii-eil  the  l!riii»h  (Miverimieiit  to  rekvH-  it»  ehartercil  ve'seU. 
with  the  re-iilt  that  raten  tell  with  a  era-*h.  They  stayed  at  a 
i«  w  tifjure  f<ir  year^*,'  There  wan  mie  nhort  respite  when  rates 
r  .>e  to  a  K'mmI  figure  in  lid.'  ami  1!»|:!,  Imt  upon  the  whole  h.ijie 
seeni<.  in.otly  to  have  run  aheatl  of  realizati.in  in  the  tramp 
traffic  anil  overliuiKlinj;  kept  the  rales  down.  The  editor  of  one 
of  their  journals  -aid  in  AuKUst,  11>14: 

I  have  repeatedly  shown  that  the  shareholder-  in  Uriti-h 
shippiufj  would  lie  k-tter  ofT  now  if  they  had  invested  their 
iTioney  in  pood  J  or  .".  per  cent  securities/ 

TiiK  Inh.iknck  or  Trami-  Uatks  on   Link  Rates 

It  is  true  that  line  traftk  and  tramp  traffic  ditTer,  hut  if  the  sea 
is  full  of  starvinj,'  tramps,  line  traftic  can  not  escape  the  inthicnce 
of  their  low  rate.  It  may  «.eeni  preposterous  to  say  that  jjreat 
passenger  steamers  of  the  North  .Atlantic  must  Rive  a  l.nv  rate 
liccause  of  the  pos-ilile  competition  of  the  passeiij;erless  tm- 
kiiown  tramp  that  mu-t  remain  tiod  up  to  the  wharf  at  IJhon  or 
Calcutta,  hut  none  the  less  that  idle  tramp  is  an  intluence  throufjh- 
ont  the  wiirld.  Ocean  commerce  is  a  w.irld  commerce.  The 
tramp  rate  is  a  world  rate.  Line  traffic  is  ditTerent  from  tramp 
Irat'tic.  yet  it  i-  not  a  wurld  to  itself.  The  tramp  can  not  cni- 
jicte  with  the  fjre.it  express  passenger  liner.  Vet  the  passenger 
limr  nui-t  carry  freight  too.  Then  there  are  freight  liners,  lots 
of  tliciii,  and  the  service  tajiers  down  to  the  point  where  it  fuses 
with  the  tramp  traffic      Much  of  the  w.irld's  line  trafric  is  done 

'  Sti-  J,   Kii^sfll   Smith,  .'/•.  ,il.,  pp.  i35-iS5.  for  examples  of  imnrofitablc 

.•■llip   optT.ltlOll, 

'  /■uKfl.iy.  .August  27,  1914,  p.  371. 


niii:.\.\u.\Tlt)N-  or  wnm,i.  «iitrriN(;  nrmRE  tiik  w.\»      21 

ill  v»'.<ifli  which  arc  tramp  tmlay,  liner  t<im<»rrow,  Itccaumr  a 
line  ha*  chartrrcil  thciii  tor  a  v<i\aKC  or  a  'iraoon.  rhiio  the 
line*  ran  at  any  tinif  incrcaM?  thfir  H-rvife  tn  taking  on  trani|)«, 
aixl  the  iinprolitalilr  ^r  uncmplnyi-d  tramp  is  ever  tciiiling  ti> 
lirrafi  into  the  hue  trathc. 


I'l'TTiNo  A  Veshki.  ON  Tiir  Bkrth 

The  practice  of  ship  limkerH  in  "  putting;  a  vetwl  on  the  I)erth." 
hhowi  the  coiHiani  menace  of  the  tramp  to  the  line.  Tlie  liroker 
nntiounce'i  that  on  a  certain  dale  a  certain  ship  will  viil  tnun 
(  alcutta  to  I.i.er|HH)|.  Then  he  busily  seeks  the  whole  pirt 
throiijih  to  tind  traftic  to  load  her  in  comiietition  with  ai.v  and 
all  hues  that  may  !«  there.  I.arj;e  shipfn-rs  always  have  the 
jxinsitiility  of  loading  a  tramp  themsclve-*,  and  since  the  chief 
hoiil  ot  the  liners  is  a  cleterrcd  reliate  of  I<>  jier  cent  it  is  (piite 
jKissihle,  if  their  rates  arc  too  high,  that  it  will  pay  the  shipiwr 
to  lose  the  Id  |)cr  cent  ami  take  advantage  of  a  tramp  ves.scl,  or  of 
the  ves.sel  loading  ai  the  lierth.  Thus  we  really  have  a  world  rate 
for  shipping.  The  wiilely  tUtcttiating  t.  .ip  rates  in  the  main 
run  in  great  curves  from  high  to  low.  with  the  line  rates  follow- 
mg  in  thei.r  wake.  This  influence  has  U-cn  graphically  stated  by 
the  editor  of  the  Hritish  marine  journal  I'airplay.  in  the  spring 
of  HUT: 

lUtt  as  a  matter  of  fact,  so  far  as  monopolies  are  con- 
cerned, the  biggest  conii)ine  on  record,  that  engineered  by 
Mr.  I'ierpont  Morgan,  was  a  fiasco,  for  not  only  was  it 
not  alilc  to  force  high  freights  in  order  to  pay  dividends 
on  the  inHate<l  capital,  i)ut  for  fourteen  or  fifteen  vears  it 
could  not  even  earn  enough  to  provide  for  de()reciation  and 
interest  on  debentures.  What  happened  in  r.Hil  will  always 
happen  again — the  tramp  cargo  lM)at  will  always  dominate 
the  situation.  If  there  are  more  cargoe-  than  ships,  high 
freights  will  have  to  be  paid.  If  there  are  more  ships  than 
cargoes,  the  shipowners  will  have  to  accept  what  is  oflfered, 
or  lay  up  their  vessels. 

The   same  philosophy   is  clearly   put   in   a   rc[K)rt   submitted 
by  a  New  York  committee  of  conference  line  representatives  Ik:- 


'J~  i\n,i(\,(    Ml    II,,    ,,111^1    vv  y„  ,  ,,,,^   »iiii'i't\i, 

("TV  a  fxninnUiT  ..i  <  ,.„yr.-,.  in  which  ihc>  ru.iiniain  tti  iki^n^c 
of  the  iU:\Tttf  it'll  ilHir  rail-,  utrp  I  h>  hit{h,  that 


pn-r  t..  I!.||,  rri-.Khi  raft-,  ha.l  .Ir..,,,^..!  ,.,  a  CiKurc  urvvi. 
. '...!>  .mkn. .„„,., .i...h„K  h,.av>  Io.h-.  ..„  the  r.-K'.ilar  l,m>. 
whKli  lu.l  thf  din,.f  .,1  c..ni,„m..i;  ihnr  M-rviav,  ,.r  wilh- 
.lr;..>.MK  ir..,„  ilu-  I.umiu^,,  m  «l.idi  th»v  ha.l  l.,„>;  U-v,,  ,.„. 

«a«.-.I      <  .n.|^iitt..n  a. ik  (rai.ip  .^xiuth  pr.,lncf,|  a  |,.vv 

.■Ml ...  rate,,  an.l  a.  ..«,„  ,,  ilu-  unrM',  tra.U  .^„i  ahra.l  .„ 
Ik  t.,„na«.-  availal-k-  (  rcicrrinjr  t-  the  rin-  t.i  rati-,  ..i 
i.'l-  t   tratiip  ,|,MmiT,  v^vrv  put   in  a  p..>it...t.  uh.-r.   ri.ev 

ciil.l  a.lvaitcc  thitr  rate.  U->n.uI  aiuihinK  Hwu   lia.l  l*cn 

i\|Krunit'«l  it)  rtn-iii  \cuT4. 

It  ..  alv,  the  o.Mtentint,  ,.f  the  c.iiferci.cc  hne  rcprc^titativr. 
that.  Ill  the  ciinriii,.,,,  rm-  iii  .^ca,,  rate,  .Inriiii.  na-nt   vvar, 
the  raliN  charge.!  I.y  the  ^.x'n'-tr  iiiie>  at 
level  -.1  the  tramp  freight  market,  aii.l 


iu>  time  ruse  tu  the 


.1  ^'',  •"',  '''"'  '■''■  '■^•«"'-""  '"""^  ^■■'"l'<  l''ve  eartir.1 
It  lliey  ha.l  u.fli.lraun  their  sfeamer»  lr..iii  their  e^Lihlisheil 
••irvi.e>  an.l  eli.irtere.l  ,>r  pjace.l  them  m  ..ther  tra.lev 

.\>  «h.HMiin  the  eii<.rm..ux  riw-  in  the  charter  rate«  .,i  tramp 
Mc.-im.hip..  „nr  wnrkiiiK  tin.ler  any  aKreemeni  ,.r  e.uiterence  the 
fMllMuiMK  represents  in  |«rt  the  .lata  furnished  l.v  the  New 
iork  c.immittee.      It  \va>  iK-f.ire  the  war. 

llluitratlDii-.. 

I'rr  r,i«-,  Jitti.-,  Vm.  to  J5r 

in  !.()..  I'Jl.t 
''5     p.  r  -l.iii.laril  in   Nov  .  191)8 
US.    Ill  Sept  .   I  "III,  an.l 

I ''-'(>  in    Nov.   |.||J 
8,  ft  mr  'on  .1  w    oi  »ttamrr  in 

Nov.,  vxm.  i„  .',.;     ,n  \,.v. 

1">I.' 
7c  p.r  im)  Ihv  in  Jan.,  I<)08,  to 

l/r  in   .Nov.,  I'lIJ 
.'   .'    I>.r     Ion     of    total     .loa.l 

w.iKht     ■apacitv    in     Ann. 

I9i».  to  V6  in  Jan..  191.} 


t.ort*  Ml  .\ii>tralia 
I. iiml.tr  trom  lli..  (.,ili   ,,,  ,|,r  kj^.^^   j,,^,^ 

Cotton   from  tl„.  (J.ilf  ,„  L-nitr.l  KinK.lom 
or  Coniincm  ..»  net  from  cli.irli-rv 

>iik!ar  from  (  ul>a  to  \,w  V„rk. 

Iim.-  .I.a'Ur  from  Haltimnr,-  |.,  (ilasKow 


(»iiiiA%iix  ,ri<>\  iir  woRi.n  «iiirriNo  RKn)iit'.  thk  w  *«      23 

Ti>  a;i|»if*imir  vihat  thrtf  r;»tc«  rnran,  ihitiK  ni  •inliiiary  t»u*i. 
w.»  havtnit  ii»  i'.(»i»  rctii.nii  thr  »amc  ami  ihc  incitnir  incrcaw 
lr..m  Hi«»  til  ;•>.)». 


FiinciiT  Deprkahion  or  ItUI 

The  (ircal  War  l)riike  i»i  a  \ktuhI  <i|'  low  rate*  aii>l  ilcj»re*%ii>n 
aniMiiK  •hifHiwiUTv  In  rehriiarv,  I'.'U.  a?nl  aKaiii  m  [iitif  the 
•>hi|>|iinj;  jnnrnaU.  1. 1, nil  n  /riv/./y  ami  /<»>/•/.» v,  «iTi-  •lioni^-.inK 
the  ivcr  |)re'«ctit  jjnUlrti  ilrcam  nf  the  ileiire^'ii'tl  <ihi|M>\\ner. 
iianu'l\,  the  pnHHihiliiy  of  an  aKreemetil  to  rai*e  Iramp  rale*,  ami 
ihe\  came  to  the  usual  concliiiiion  that  it  cotihl  not  Iw  ilone.  de- 
lipile  the  fact  that 

IVpre*»ion  in  the  ohippini;  trade  h.ii  fnllowcd  »o  nviftiv 
on  the  hecN  of  a  rcniarkal)le  lKM)ni  that,  ahnont  Iwlorc  ship- 
owners have  had  time  to  reali/e  it.  freijjhn  have  touched 
an  iinprotitatile  ievel.  Steamers  arc  lieitiB  laid  up  at  cer- 
tain |K.rt5»  in  steadily  increasing  nuniliers.  .  .  .  Seventy 
dreek  l)oats  are  laid  up  in  the  principal  {K)rts  of  Greece. 
and  many  Scandinavian  ves^N  are  idle  at  the  buoys,  as 
well   as   a   lar^e   numln-r   of    British    vessels    in   our   own 

fX'its \t  tlic  nrcH'tit  lime  vessels  of  ill  nations  are  laid 

up,  for  the  simplest  reaium  that  there  i    no  need  f.ir  ihrm.' 


In  June  a  British  tramp  sailed  in  hallast  from  Australia  tn  South 
.Africa,  frotn  .South  .\frica  to  .Montevidet).  and  then,  still  search- 
niu,  continued  her  eirpiy  wanderiiijjs  to  Marliadoes.  In  July  the 
shipowners  were  |irej)arinn  themselves  for  a  |)crio<l  of  long  «le- 
prcssion.  and  the  (|uestion  was,  "how  lonp  would  it  last?"^ 
/./(iy'/>  ll'i'rki:.  August  l'1,  page  ."»47.  predicte<l  th.it  the 
year  lull  w.iuld  ro  ilown  as  the  blackest  in  shipping  his- 
tory generally,  and  referred  to  anticipatcil  loss  of  earnings  and  to 
the  provpects  of  the  steel  makers  shutting  down  their  plants  he- 
cause  shiphuildcrs  would  not  Imy  plates.    The  lines  in  the  cargo 

'  i  l.<\,r.,  ir.wklw  rrhruary  .'0.  I')14.  pi..  I>0-121. 
'  rahfl'iy.  AiiKust.  1914.  p.  345. 


'A 


iMi.n.Nn;  hk  thi:  i;Ki:.\r  \v\k  iton  siiippint. 


trade  liciwecn  Scdtlaiid  and  t;ma<la  and  the  L'nited  States  were 
reducing,'  tiieir  >ailin},'s,  ami  similar  acc<iiiiit>  nt  depression  were 
Xu  be  had  from  nearly  all  parts  of  the  world. 


Till-:  P)iiri;KNi:ss  ()!•■  Intkrnationai,  Com  petition 


Intti  this  period  nf  lanjjnid  ho])ele-<sness  broke  the  war,  but 
it  ilid  ni't  lireak  upon  cotuplete  international  pleasantness  in  the 
wdrld  of  shippinj;.  Ajjrecinents  anions  carriers  do  not  alwavs 
nuaii  pleasantness.  The)-  may  be.  and  usually  are,  like  the 
treaties  tliat  end  any  war.  for  such  indeed  they  usually  are. 
Diirin;;  the  summer  of  I'.M 4  a  bitter  rate  war  between  the  der- 
man  and  i'.ntjlish  lines  to  I'uenos  .\ires  reached  a  crisis,  h'or 
some  time  it  had  been  true  that  every  time  the  one  built  a  shij) 
the  <ithcr  built  a  ship  and  started  a  new  one.  until  in  July  two 
tierman  vessels  had  been  tied  up  for  want  of  traffic. 

The  shipping  situation  between  these  two  great  rivals,  Britain 
and  (iermany.  reflected  the  facts  of  their  national  genius,  namely 
individualism  versus  organization.  The  tranij)  ship  is  an  indi- 
\idual  task,  a  business  unit.  It  is  owned  by  a  man,  ojierated 
by  a  man.  In  this  tield  (iermany  has  played  no  important  part, 
while  I'jiglish  owners  w  ith  their  fleets  of  ten  to  thirty  Ixjats  have 
carried  much  of  the  bulk  freight  of  the  world.  In  contrast  to 
this,  the  line  is  a  great  organization,  a  coo])erative  enterprise, 
one  in  which  governments  can  w  dl  and  effectively  help,  and  one 
in  which  the  (ierman  (iovernmeiit  has  helped  much  more  than 
has  the  luiglish  (iovenmient.  This  means  organization,  in  which 
( Iermany  is  strong,  in  contrast  to  individual  liberty  and  initiative, 
in  which  Hngland  has  led  the  civilized  world.  We  can  see  its 
result.s  in  the  fact  that  the  Hamburg-.Xmerican  Company  with 
seventy  services  was  by  far  the  widest  reaching  carrier  upon  the 
face  of  the  world  oceans.  The  ("ierman  coasts  were  almost 
clear  of  foreign  lines,  yet  German  liners  stopped  at  the  ports  of 
almost  every  other  country,  as  witnessed  by  the  following  bitter 
lament  of  the  editor  of  Fairfilay,  December  :.*4,  1U14,  page 
10(11: 


()R(;.\MZATI()\    OK    WORLD    SIIIPPINi;    BF.FORF.    Till:    WAR  ^.'J 

Our  enemy  was  fast  (iermanizin"  the  wi-rld,  ami  bid  well 
to  drive  (lur  mercantile  marine  -'T  In-  .n*,  so  tar  as  profit- 
able trading,'  was  concerned.  \\  c  ceruiirix  »lioiight  it  a 
disgrace  to  this  country  for  '  itr.ran  l:^cr^.  )  he  leaving 
here  for  our  colonies,  to  say  Mitlung  <ii  tne  •uiniiliation  of 
being  driven  completely  out  of  ct'ci'ii  '.uides. 

In  a  thing  so  evenly  balanced  as  must  be  the  trade  of  the  free 
sea.  it  l)econies  plain  on  a  little  reflection  that  the  influence  of 
governmental  action  will  be  pre;)otent  whether  for  aid  or  in- 
jury. What  will  happen  after  the  war?  It  will  end  with  the 
nations  themselves  in  control  if  not  in  possession  of  their  mer- 
cantile marines.  What  will  be  the  policy  of  the  nations  in  o[)er- 
ating  these  fleets?  Will  they  promptly  hand  them  back  to  private 
owners?  Will  they  operate  them  themselves,  or  will  they  take 
a  middle  ground  of  direction,  subsidy,  or  other  financial  sup- 
port? In  an\-  case  a  host  of  problems  present  themselves.  We 
can  not  expect  a  chaos  of  unending  comjietition  and  rate  wars 
between  the  nationally  supported  steamship  lines,  but  the  f'lcr- 
man  experience  seems  to  indicate  that  the  lines  which  have  the 
most  government  support  will  in  the  end  be  able  to  win  out  over 
lines  that  lack  such  advantages.  Certainly  we  shall  need  a  care- 
fully thought  out  marine  policy.  Fortunately  we  shall  have  a 
little  time  to  think,  for  the  early  peace  period  of  moinhs  or  years 
will  be  a  period  of  pinching  ship  shortage  when  all  the  world 
will  strive  against  necessity.  The  first  strife  will  be  against  the 
vacuum  made  by  the  .submarine.  When  this  is  filled  and  ships 
begin  to  hang  at  the  buoys  waiting  for  a  call,  at  starvation  rates, 
we  shall  then  have  a  very  real  problem  to  face.  Before  that 
time  arrives,  we  shall  need  to  have  formulated  a  policy  that  shall 
not  be  the  policy  of  the  landsman  that  America  has  thus  far  in- 
sisted on  being. 


CHAPTER  II 

The  World's  Shipping  Industry  during  the  War— Brief 
Summary  with  Special  Emphasis  on  Freight  Rates 

An  End  ov  Freedom  on  the  Seas 

Then  caiiic  the  war,  and  now  all  is  changed  in  this  world  realm, 
the  sea.  Xo  more  is  it  the  place  for  individualism,  for  freedom 
to  do  a?  one  pleases,  to  come  and  go,  compete,  combine,  cut 
rate>,  make  connnercial  war.  War  of  blood,  iron,  and  death  has 
.swallowed  up  rate  war  and  freedom;  every  vestige  of  Ixith  is 
g.me.  Lais.u-c  fairc  no  longer  operates  upon  the  sea.  It  may 
.Mime  (lav  return,  but  today  (May,  r.tl8)  no  shadow  of  it  retnains. 
Iron  rules  prevail,  cohering  the  operations  of  the  world's  ships 
and  of  shipowners.  Without  the  consent  of  government  you 
may  not  now  buy  or  sell  a  ship,  nor  build  one.  \\  ithout  con- 
.<ent  of  government,  you  can  not  hire  nor  sail  her,  nor  buy  coal 
for  her  bunkers,  nor  take  a  single  piece  of  freight.  Although 
you  may  have  owned  the  ship  for  twenty  years,  now  you  may 
not  even  set  th*;  rate  for  her  services.  The  ships,  the  ship- 
owners, and  the  shippers,  have  become  an  army,  and  as  with 
armies,  so  now  it  is  w  ith  ships — you  do  as  you  are  told. 

1  luw  has  this  change  come  about  ? 

r.\R.\I.YSlS  OK  Tr.VUE  .\T  THE   BEGINNING  OF  THE  W.\R 

The  war  fell  on  a  worltl  oversupplied  witli  shipping.  Ship- 
owners, like  everybody  else,  were  stunned  by  the  e.>cp!osion,  and 
the  war  itself:  their  industry  had  a  paralysis — a  quadruple 
l)aral\--i--. 

( a  1  \'e-sels  arriving  in  British  pcjrts  found  the  financial  con- 
dition so  disturbed  by  war  that  there  was  no  cash  with  which 
to  pay  freights.     Therefore  owners  would  not  release  cargoes. 


■hlllilliia 


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i;;ri,ri:\(i:  i>i-    riii;  i;i<i:.\i    w  \k  ri'nN  siiii'riM. 


and  M>>i'l 
la>tc'l. 


Ia\ 


iilly  at  till'  .!i>i-k>.      I'Hr  tw.i  iiMiulis  tliis  paralssis 


Sliiix  liiTi-  [\.^'.|  ran  imt  obtain  carycs  for  tlie  reason 
ilia!  American  ^liipijcrs  are  nut  Cdnviiicol  that  tlicv  car  },'ct 
(liiii'k  payment.  .  .  .  Lntil  the  >tate  of  the  financial  market 
i«  inipriived  tliere  will  continue  to  he  liiiiulreds  of  vessels 
1\  in<,'  iille  at  the  docks.' 

I  /'  ■  .Meaiiulrli.  (iermaii  r;iiiler^  ha<l  alnlo^t  closed  distant  »eas, 
such  a.--  the  Simtii  i'acitic,  the  South  Allantic,  and  the  Indian 
<  )ce:iii  where  the  famous  I'.indcu  ran  her  wild  and  destructive 
career.  I'or  many  da\s  the  rai<ler->  reajied  a  harvest  of  I'.riti-h 
shijipiuf,'.  It  i>  not  sinpri>in.!.;  that  on  the  Mh  of  Au,uu<t  the 
i'.riti>h  sli.p  charter  market  was  reported  {J-uirf^luy }  to  he  •■all- 
salute!}  dead."  and  on  the  li'th  Syren  and  Sliif'f'in;/  declared 
"  (.'harteriui,'  has  cmne  to  a  coini)lete  standstill  in  all  the  trades 
of  the  world." 

((I  Owint;  to  the  daufjer  of  destruction  by  raiders,  uiuler- 
writer>  virtually  refused  t(.i  insure,  atnl  as  insurance  is  one  of 
the  uinv  ritten  laws  of  the  sea,  no  shipowner  would  scud  his  ship, 
no  shipper  would  send  his  frei]L;ht.  The  conse(|uent  tie-up  was 
almo^t  complete,  except  in  nearby  seas  where  the  British  Xavy 
could  furnish  ])rotection. 

riovernments  rescued  shipjiers  from  the  insurance  dilenuna. 
Within  three  weeks  all  leadini^  maritime  countries  had  'j^Wvn 
national  aid  in  the  in.surance  market,  either  by  direct  S"vern- 
nient  insurance  or  by  subsidizing  private  enterprise. 

(f/)  This  enabled  the  shipping  business  to  resume,  but  the 
bu-inc-;s  i-  a  speculative  one,  and  the  world's  mind  was  unsettled 
— the  attention  of  everybody  was  fixed  on  the  great  drama  in 
nnrtlicrn  Fr.incc.  .\s  there  are  in  normal  times  stocks  enough  t)n 
iiruid  for  a  short  time,  business  languished,  for  no  (jne  knew 
whether  the  market  was  going  to  go  up  or  down,  whether  the 
war  would  be  long  or  short.  Ocean  freights  accordingly  de- 
clined even  from  their  unprofitable  July  level.  In  the  words  of 
a  London  shipowner  on  the  S.lth  of  .\ugust: 


'  Lhyd's  U\-<-!.lx.  (X-tobtr  2.  1914,  p.  627. 


Tin;  siiii'i'iNc;  indistky  durin*;  tiii:  uar 


J'J 


ThtTf  arc  plenty  oi  Ixiats  ready,  but  no  carjjo  U>  lift.  Ft 
the  >itiiati(in  ceiitiiuie-;  as  it  exists  tnday,  tliere  udiild  seem 
to  Ix.'  Ill)  alternative  Init  tor  dwiiers  to  la\  iij)  tlieir  ships, 
pendinj;  an  easier  linancial  position  and  an  increa>e,  nut  only 
in  lreij;ius,  but  also  in  the  volume  of  trade  movinj;.  And 
1  can  nut  myself  see  this  improvement  coniiny  alx)iit  until 
the  war  is  over. 

One  ninst  remember  that  St.  Petersburg,  (iothenburj,', 
rop<Miba},'eii.  Dan/it;,  llainlnir,!,',  Stettin,  Hmden,  .Antwerj). 
Rotterdam,  and  Trieste,  are  ])ractically  closed  to  trade. 
These  are  ail  larj^e  receivin}(  (lorts,  ami  the  fact  that  they 
are  ail  shut  down  means  that  .some  uf  the  largest  markets 
in  the  world  are  closeil  to  shijjowners. 

The  whole  of  the  I'.l.ick  Sea,  too,  is  practically  shut  to 
commerce.        .    . 

Willi  ali  these  i)orts  closed,  the  result  makes  itself  felt  at 
once  in  the  way  of  a  surjjlus  of  tonnage  for  a  largely  di- 
minished volume  of  business.  In  outward  business  char- 
terers are  reducing  rates  I)y  shillings  per  day.  Cardiff  to 
Rio,  for  instance,  dropped  :>  shillings  at  one  fell  swoop. 
We  are,  as  a  matter  of  fact,  getting  down  to  a  level  of  rates 
that  would  have  been  cavilled  at  prior  to  the  war,  and  one 
fails  to  see  lunv  owners  can  take  up  engagements  at  these 
figures  when  they  are  faced  with  lieavy  war  risk  charges.' 

On  tile  7th  of  Septemljer  the  Germans  began  the  retreat  from 
the  .\Jarne.  This  retirement  helped  maintain  the  early  conviction 
that  tlic  war  would  be  short.  October  was  filled  with  military 
uncertainty,  but  during  that  inonth  the  Germans  dug  in  on  the 
.\isne.  (Jn  the  17th  of  September  the  Dutch  lines  again  adver- 
tised sailings,  and  on  the  :.'!tth  (jf  October,  f  airplay  reported  that 
time  charter  rates  had  gone  up  a  shilling  a  ton  per  month.  But 
the  two  months  had  given  the  shipping  world  no  visicjn  of  what 
was  in  store  for  them.  Alx.ut  the  20th  of  the  month  Messrs. 
Ropner  S.  Co.,  British  shipowners,  sent  the  following  letter  to 
their  shareholders : 


Dear  Sir  or  Madam :    Possibly  some  of  our  shareholders 
are  wondering  what  effect  the  war  in  which  we  are  involved 

'Lloyds  Ifeekty,  August  28,  1914. 


iiO         iM-i.i  i:\ii;  111    nii:  ckkat  uah  i  tun   siiutinc, 

is  liaviiiv  oil  tlic  -liippiiij,'  iiiiliislry,  and  wi-  tliiiik  it  is 
a<l\i>alilf  Im  iiu'iirtii  tlifiii  iliat  the  positimi  at  |)rf>ciit  i> 
ilcplurablc' 

A  little  later  the  Knyal  Mail  Stt-ain  Packet  Gnipany  deferred 
dividend.-  because  <il  the  heavy  exjienses.  especially  iiisiiraiice 
which  hail  iiinre  than  ntTset  increase  in  freijjht  rates  that  tncy 
had  made.  The  International  .MciTantile  Marine  alsu  decided 
til  defer  interest  on  bunds  for  the  same  reasons. 

In  early  Xoveniber  the  l'.nj,dish  attempt  to  turn  the  (ierinaii 
liank  ceased  Ijefore  the  furious  attenijits  of  the  (lerman  arm. 
to  reach  Calais,  and  the  resnltinji  loiij;  drawn  and  terrible  Iwltle 
of  the  Vser  settled  the  conviction  that  t!ie  war  would  i)e  lon^. 
It  was  also  discovered  by  this  time  that  the  war  was  a  matter 
of  artillery  and  materials.  Manufacturing  bej,'an.  and  a  revival 
of  trade  was  bound  to  follow,  and  prosperity  once  more  came 
to  the  sea. 


The  Revival  of  Tradf,  an-d  Shipping 

On  the  12th  of  Xovember.  Fairplay  reported  rates  to  be  climb- 
ing day  by  day.  and  that  ship  values  had  doubled  in  a  month. 
The  British  settled  down  to  prepare  for  a  loiip  war.  As  the 
armies  increased  in  .size,  the  government  requisitioned  more  ships 
to  carry  army  supplies,  and  the  shipping  world  began  to  realize 
what  was  involved  when  East  European  supplies  were  cut  ofT 
from  West  Europe  It  means  increased  ship  business  instead  of 
reduced  ship  business,  for  it  means  more  distant  .sources  of 
supply,  which  makes  more  ship  mileage.  The  case  of  Xorway 
is  an  excellent  example.  Before  the  war  it  was  calculated  th.it 
2,-.o,0(iO  tons  gross  of  .shipping  was  sufficient  to  supplv  Nor- 
wegian needs.  .\t  that  time  most  of  her  grain  came  from  (ier- 
many  and  Russia,  but  by  the  end  of  lf>17  the  necessity  of  secur- 
ing her  supplies  in  distant  places  made  it  necessary  to  u.se  7.")0,000 
tons  of  slii|)ping  instead  of  I'.'iO.OOO  tons.-  By  January,  1!)!.'), 
the  rates  had  risen  so  that  Fairphiy  (Jan.  7.  101.5).  the  champion 

I  luiirfhy.  October  22.  1914.  p.  640. 

'  K.  !•■.  Knudjon,  Glasf;oz,.'  Herald.  December  29,  1917. 


TIIK   SIIII'riNCi    IMHSTRY    IifRINC    TIIK    W  \R 


il 


(if  the  shi|)<mner,  was  deritliiiK  those  thei)ri>ts  who  wire  talkiii^j 
lit  lixinK  maxitniim  rates  fur  shipping'.  The  iie\t  week  lii^Iier 
rales  tlian  ever  iHrfore  kiuiwti  were  reptirteil.  In  aimther  week 
I'airplay  remarked  editorially  that  the  scarcity  of  tonnaRC  was 
liecomiiiR  more  ;md  more  scr- )ns  every  day,  -pecialiv  as  the 
Italians  were  furiously  hidding  for  ships  to  supp     'heir  needs. 

The  Ship  Kamink  andtiik  Siiii'  Prices 

The  relative  moderation  of  the  then  record  rates  of  January. 
1I'1.'>,  can,  however,  be  seen  hy  an  examination  of  what  followed. 
Thus  the  rate  on  cotton  from  United  States  to  Uritain.  which  was 
:;')  cents  a  hundred  pounds  in  July,  l!»14,  ro?.e  to  40  cents  in 
Septemlier,  .")0  cents  ^n  Xovemlwr,  )Jl  in  January,  11>1."»,  .$2 
in  .April,  hack  to  $1  in  July,  up  to  $.t  in  January.  1!»1<;.  $.',  in 
December,  I'.Uti.  These  figures,  unusually  high  though  they  are. 
have  now  Ijcen  exceeded.  In  January.  r.Ms.  )j(7  ;,  Innulred  was 
being  offered  for  so  heavy  a  commodity  as  syrup  in  barrels,  from 
North  .Atlantic  ports.  United  States  to  London.  On  June  1.  1!>1T, 
Lloyd's  H'cch-ly  reported  4(l(l  siiillings  a  ton  on  coffee  from 
Rio  Janeiro  to  Marseilles,  and  even  the  lowly  coal,  which  ordi- 
narily goes  out  at  almost  ballast  rates,  was  paying  125  shillin^js 
a  ton  from  United  States  to  .Argentina. 

But  worse  was  yet  to  come.  In  Octcber,  lltlT,'  tioi)  ^hillinKS 
per  ton  were  paid  on  a  0,000  ton  cargo  of  rice  from  Burma 
to  Cette.  the  French  port  set  apart  for  the  Swiss. 

It  should  always  be  remembered  that  the  ocean  rates  are 
world  rates.  Thus  .vhen  the  interallied  chartering  executives 
authorized  -  a  rate  of  47  shillings.  i>  pence,  per  ton  per  month 
for  neutral  vessels  of  over  10,000  tons,  and  not  exceeding  :>-2 
shillings  on  vessels  up  to  2.000  tons,  it  is  worthy  of  note  tliat 
there  had  been  si.x  weeks  liefore  a  oO  per  cent  rise  in  rates, 
namely  from  40  cents  to  <iO  cents  a  hundred  pounds  for  the 
very  short  journey  across  the  South  China  sea  from  the  French 
port  of  Sigon  to  Hong  Kong. 

'  Fairflay.  October  11.  1917.  p.  606. 
'  Lliyd's  Weekly,  February  2,  1917. 


iMi.i  i:\ii:  OF  Tiir.  'Irka  i    u  \k  ii-dn  siiiitinc; 


in  Scptc'ml>er.  1!"17.'  a  \t>ncI  cli  ittcrcil  at  Rucnn-,  .\\rv<  fur 
I".nf,'l;mil  at  t  "  piT  tuit,  MiMit  part  .il  the  ?.pat:c  the  next  week 
fnr  ca-^ks  I  if  fallMW  at  CM  per  tnii. 

In  Xi'Miulier,  HtlT,'  an  nfferdt  !MH>  >hilliii^'s  per  tnii  trnni  the 
I'hilip|iiiH-  tn  Sjiaiii  failed  l>>  attract  a  vessel.  The  next  tiicnith 
.111  >.:;ni»  full  steamer  was  eliartercd  to  ro  from  Sail  I'ranciseo 
t"  tliree  ports  in  Australia  and  return  for  the  sum  cjf  ilno.nito, 
enniij.'h  t'l  lia\e  m^re  than  paiil  the  cost  piiee  of  sueh  a  steamer 
ill  I'.M  I.  Most  astoiindinj,'  of  all  is  the  well  authenticated  case 
of  ^I  per  pound  I)cinjj  asked  and  ohtaiiied  on  parcel  trei^lit  from 
Xew  \'ork  to  Marseilles. 

The  awful  i)ressiire  for  shijipinp  is  apparent  when  the  per- 
ceiitaj^e  of  increase  in  the  rate  is  noted.  Ships  which  in  I'.M  t 
were  to  \>e  had  for  J  slijlhnj^s  •!  pence  per  ton  per  month,  in 
r.MT  were  hringinfj  47  shillin>,'s  (>  pence — excellent  illustrations 
of  the  extent  to  which  extremes  of  competition  can  ro  when 
demantl  is  keen  and  supply  is  scarce. 

The  intluence  of  these  rates  on  ship  ()rices  has  been  equally 
expansive.  The  price  of  a  ship  iiatiirall\-  lluctua'vs  with  her 
earning,'  power.  .\s  evidence  of  this  a  British  tirm  in  the  habit 
of  huihliufj  a  certain  standanl  kind  of  ■2,-2'>H  ton  shelter  deck 
freifjht  vessel  for  sale  for  their  own  account,  reports  the  f(jllow- 
ing  prices; 

On  February  l.'i,  1!"10.  the  company  would  have  been  only 
too  pleased  to  have  accepted  tlT. •")(•()  for  a  vessel  of  this  type  ; 
on  the  1st  of  July,  lIMi',  they  asked  122, .'>M0:  two  months 
later,  l.i't;,7.".n.  and  a  month  later,  CJ7,."in().  On  .\iigust  .'!»», 
ll'l.'J,  their  price  had  dropped  t<i  1!-'>,<H)(».  On  Xovembcr  :i. 
it  was  lu'4.:.(i(»,  but  by  May,  l'.M4,  it  had  dropped  to  tiJl.r.oo 
and  just  prior  to  the  war  only  t!L'0,<)(>()  was  asked.  liy 
November  ;!,  the  price  hatl  risen  to  ti':!, .">()(»  and  on  Xo- 
vember  l'.'>  to  t^'ij.ooo.  On  the  .sth  of  [anuary,  l!Ur>,  they 
were  asking  t:.iL',(HMt  with  delivery  in  four  months,  which 
shows  an  advance  since  the  14th  of  June  of  no  less  than 
<>0  j)er  cent.^ 

'  Fditf-Uiy.  Si|)tiTnl)i'r  6.   1017 

'  Ur\,rs  Ifcckly.  Xovtmlier  16.  1917. 

'  Fairfhy,  January  14,  1915,  p.  55. 


VIII"    SIIIPPING    IN-m^STHV    DUBINC.    THE    WAR 


M 


liii    tlusc  (ij;iirc^  arc  very  moderate  in  comparison  to  the  later 
i-strciiies  oi  tile  war. 

In  times  ni  piare  ISriti^ih  freij-lit  ships  ordinarily  cost  about 
td  to  tT  per  ton  oi  dead  weight  lrei>;lit  carrying  capacity,  but 
in  tin-  >prinK  nt  I'.MT  '  a  l<i.(M)0  ulw.)  >teamer  building  in 
Inion  Iron  Works,  San  lranci>co,  and  about  ready  for  delivery 
was  leported  sold  for  ftii)  per  ton  \s  a  restih  of  this  price 
Japanese  and  American  owners  v  ith  vessels  under  way  for  de- 
liverv  Uctolier.  U'lT,  to  March,  11'1>*.  wh("  h.id  l)een  willing  to 
sell  lor  #200  j>er  ton,  withdrew  them  with  the  idea  of  securing 
^;joo  a  t<jn  when  nearly  ready  for  delivery.  As  speculators  they 
won,  for  the  sliii)s  were  worth  $">.")0  per  ton  in  the  early  months 
of  l!M». 

The  prices  for  old  vessels  are  no  less  astonishing.  In  the 
sunmur  of  llU",  the  I'rench  (iovernn\ent  paid  lUT.'-.'H'ii  fnr 
shij)  which  ten  years  ago  sold  to  the  Japanese  for  i;;J2,0()0.  I'y 
all  the  rules  of  good  shipping  conduct  this  vessel  in  liUl  was 
ready  for  breaking  up.  yet  this  piece  of  floating  junk,  which  sold 
for  .tlf.o.iHiu  ill  middle  age  ten  years  Iwfore  brought  $1,MO(»,000, 
so  nard  pressed  were  the  .\llies.  These  prices  arose  from  the 
enormous  profits  of  the  shipping  business.  Dutch  shipping  com- 
panies paid  I'Mi  per  cent  dividends;  Danish  shipping  shares  rose 
UK)  points  in  a  week,  reached  1,000  on  a  par  of  100,  and  made 
profits  in  a  year  that  were  greater  than  the  capital.  It  is  no 
wonder  that  after  .\merica  enter  the  war  the  cry  of  "ships, 
ships,  and  yet  more  .ships"  came  continuously  across  the  sea 
from  the  leaders  in  Europe. 


Increased  Demand  and  Low  Efficiency  of  Shipping 

Many  causes  have  combined  to  produce  this  world  shipping 
famine. 

(i7)  First,  of  course,  is  the  inconspicuous  suljmarine  making 
its  conspicuous  sinkings.  This  and  many  other  causes  have 
helped  to  produce  the  shipping  scarcity.  Among  these  secondary 
causes  may  be  mentioned : 

'Fail flay.  May  10,  p.  780. 


•M 


iNH.riMi'  HI'   riir  tiKi  \r  w  ah  t mv  -irii'i'i\(. 


I  '')  rill'  ;ili>M!iiti'  iiuTi'.-iH'  "f  ni't'il  I'T  -liiii-.  In  a  Hhnri  time 
after  ihf  war  ua»  itiuliT  v\ay,  llriiain  w,i^  ti-itin  ■iiif-liatf  her 
hujji'  tlixl  ill  till'  war  citluT  in  the  dinrt  service  ot  luT 
null  iiet'ds,  iir  itulirictl\  li\  haiiiliiij;  t>\vr  the  vcm.-!".  l<>  her 
allies, 

(i)  (.  I"»ely  akin  tn  llu'*i'  was  the  necessity  nf  lonjjer  haul. 
This  iH'ianie  inevitalde  ulieti  the  (  eiitral  I'nweiH  cut  I'lir^iie  in 
fwn.  As  with  tile  alxive  meiitinnctl  case  i)f  Norway,  which  re- 
(|iiireil  three  times  as  nuich  loniuiKe  alter  the  I'.altic  was  dusfd. 
sM  the  lilnckiti«  cii'  the  Dardanelles  cut  lill  hrance  and  Italy  inrti 
the  f^rain  supply  <if  the  I'lack  Sea.  The  dnsiiiK  of  this  source 
affected  not  only  the  Mediterranean  cotnhatants,  hut  :\\<n  'irecce, 
Spain,  and  TortULjal,  and  e\en  Uritain  herself,  compellin,;;  all  these 
|)eople  to  seek  their  t,'rain  supplies  in  more  distant  places — South 
America,  India,  .\ustralia  ami  .\merica. 

( (/ )  Then  after  reducing,'  the  shipping  that  was  left  available 
for  increased  work,  the  war  crowded  V  hipyards  with  war 
work,  making;  it  iiiifiossiMe  to  (.;et  adet|u.i  ^  oveihauliiifj  to  keep 
the  ships  in  order,  and  even  tlelayetl  imperative  repairs  when 
vessels  were  disal)led. 

((•)  The  danger  of  attack  hy  the  submarine  made  nccfssary 
lon^  detours,  thereby  increasinp  the  time  at  sea. 

(/)  The  management  of  ships  by  amateur  hands  of  the  war 
m.ichine,  according  to  the  often  bitter  complaints  of  the  ilritish 
shipowners,  still  fur.iier  reduced  the  et'ticicncy  of  such  ships  as 
sailed. 

((/)  \'ery  ciiisiderable  reductions  in  active  tonnage  resulted 
from  the  detention  of  enemy  ships  in  nentr;il  harbors,  and  the 
holdinfj  of  ships  in  port  for  fear  of  destruction  by  submarines. 
.\t  the  end  of  1!»1T  half  the  Swedish  marine  was  reported  idle 
for  this  cause. 

{In  Lastly  and  perhaps  worst  of  ;ill  was  the  port  con:>;estion 
that  promptly  followed  the  revival  of  trade  after  the  outbreak 
of  the  w.ir.  The  attempts  to  increase  the  traffic  at  any  par- 
ticular point  showed  us  how  surprisiny;ly  delicate  was  the  balance 
between  the  trade  of  peace  and  its  facilities,  how  limited  were 


THK   SHIPPING    ISDL'*TIIY    mHING   THE   WAIt 


35 


Htn.agc  facilities,  how  cotiiitant  wn*  the  llow  of  ko(m|s,  ami  how 
low  tlif  reserve*  ordinarily  Kept.  When  tlie  ar  cho()pe<l  w>irl(l 
trade  in  two,  and  made  it  necessary  t"  ■iiipply  great  armie*.  the 
trade  of  some  |>ort»  was  Huddenly  doiil)led  or  tripled.  Taralyiis 
and  conjjestidii  inevital)ly  followed.  For  e\aniple.  France  hail 
received  much  of  her  iminirt  from  the  Uhine  port',  of  Uotterdani 
and  Antwerp,  which  latter  Mxm  passed  into  (lerman  hamU.  Ihis 
naturally  thicw  her  tr.ide  around  'o  the  wotern  port>i.'  .iid  .it 
the  same  time  the  necessitie;.  oi  rapidly  increa-iinjj  arnnes  hrought 
a  steady  succession  of  ships  with  entirc'y  unusual  sufiplies  to  the 
ports  of  the  rliamcl  and  the  Hay  of  Ihscay.  For  the  time  that 
the  I'rench  capital  was  at  Uordeau.s.  nearly  all  cargoes  for  rov- 
crnment  accpujit  went  to  Itordeaux.  which  j)ort  was  in  a  terrihU- 
tangle.  This  situation  seems  to  have  resulted  wherever  trathc 
was  suddenly  increased. 

I'rom  .Mexanilria.  I'gypt.  cnme  the  complaint  that  it  took  10 
to  •-'••  days  to  unload  a  steamer.  IJoyd's  Weekly.  May  -'^,  1015. 
iep<irted  that  J**  steamers  lay  at  anchor  in  the  roads  at  Marseilles 
waiting  for  a  lierth  and  without  detinite  information  as  to  when 
they  were  likely  to  get  inside  a  harlMi.. 

Liverpool-  had  in  niid-.\pril  70  vessels  waiting  for  discharging 
berths,  and  many  of  the  Ijerths  allotted  to  steamers  were  full  of 
cargoes  discharged  from  previous  vessels,  technically  known  as 
foul  herths.  and  therefore  practically  useicss  for  the  purposes  of 
discharge.  Three  weeks  later  the  number  of  waiting  vessels  at 
Liverpool  was  7>. 

In  January,  (ienoa  had  over  to  coal  and  grain  laden  steamers 
in  the  outer  harbor.'  Yet  Fairploy  in  its  issue  of  October  1." 
previously  had  been  conmicnting  upon  the  decadence  of  the 
shipping  of  (ienoa.  By  the  fall  of  1!>1.'>  it  had  become  so 
crowded  that  for  a  time  the  unloading  of  coal  vessels  was  entirely 


'  M.  tie  Moiizie  in  the  French  Chamt>er  of  Deputies  said  that  before  the 
war  I'rancc  importid  ever  18.000.000  tons  .)f  frciRlit  by  land.  In  191«  it  had 
dropped  to  1.000.000  while  4J,000,000  tons  came  by  sea.  fairplay,  September 
U,  1917. 

'Lloyd's  If.-ck-h:  May  7,  1915. 

'  I'jirl'lay.  January  7,  1915. 


3« 


l.Vfi.rrNtE  <>i    rirt    ••ut  \i    \\  \h  i  i-on   <iMii'iMN<; 


ftri'hiliitnl  '     I'l'rh.ip*  tlu-  extreme  cite  "i  cniijiftiim  i«  C'>vcrr<| 
by  thi«  lanu'iil 

It  I*  iiinii'trinM  tti  Ih-  pavjtij;  ►••  shitipitif^^  per  cent  war 
preniinin  t'nr  thno  itii'iith-  I'^r  ilu-  prniltKe  nl  liaviiii;  a 
imat  at  a  I'ttiirh  purt  I'nr  im'  ilav>  a-,  a  uarchnii-r  .Some 
l»iat'»  alter  arnvmii  at  certain  Iremh  pMrt-  liavi*  l>cci» 
irilitcil  til  a  ■«eti)iii|  ami  even  a  thinl  purl  ami  in  mie  ca»e 
t')  a  fourth  |Mirt.' 

Ll,<\ii's  llixkly  ( Jan'.tary  U,  liMii)  repiirf>  that  (ila*K'vw  was 
in  a  t>a<l  >narl  liecaiHc  ut  iiicrca'<eil  war  tragic,  nearly  all  nf  which 
was  rail  Iwirne.  ami  p<irt  authorities  were  consiilerini;  p'otin-,'  all 
railway  faciliiie*  hy  all  lines  as  a  matter  tit"  relief,  Fhe  next 
month.  I'chniary  l'.'»,  Lloyd's  reiuirted  that  l.omlon  was  so  ovc  • 
crowiled  that  it  was  rar<'  for  a  vc*st  I  to  ^vt  nnloadcti  within  two 
weeks,  and  that  it  often  took  longer,  (hie  of  the  cause  of  this 
p<»rt  conRestion  was  the  actual  lalmr  shortajie,  l>ecausc  men  had 
(jone  to  the  war,  and  the  constructive  labor  shoria(,'e  arisin>;  from 
new  prosperity.  The  hinh  wa^e-  ''  the  stevedores  resulted  in 
a  sense  of  atthience  which  enabled  liicm  to  enlarge  their  in- 
dulgence in  holiday-,,' 

I 'on  coni;e>tion  hcKait  in  France,  Kn^jland.  and  in  Italy,  but  it 
extended  to  America  also.  1  or  many  months  \ew  York  was 
conitested  to  .i  point  of  inet'ticiency  rivaling'  that  of  l-".iiropcan 
ports,  and  helping  to  produce  an  appalling  railway  congestion. 

With  all  these  disturbing  elements  it  is  easy  to  sec  why  we 
had  >hip  famine,  starvation  rates,  .m,!  shipping  profits  that  were 
iieyund  the  shipowners'  fondest  hope. 


Siiiriuii.i)r.V(; 

\\  hat  wa--  the  world's  response  to  this,  the  prcatc<t  goad  fh.il 
ever  pre-sed  upon  the  desire  of  gain  in  shipowners  and  ship- 
builders?   The  first  result  was  that  the  shipowm        ok  his  profits. 

'  ll-y\d's  ((>c</v.  OitotHT  .'.'.  I')i5,  p   f,76, 
■  lyirplay.  OctoiuT  .X).  1<M4.  p.  (,;(,, 

'  Sir  \Mrm;ii:  Hill.  Sicritary  Livtrp«ol  Shiixjwner*  .^smi  ,  qiiotcd  in  I'air- 
I'liiy,  J.-imiar>  .'I.   l'M5. 


r»ii    «iiii'Mm;  i\m'>irRv  r»i'itiNii  nii    w  m< 


.17 


all  hr  i.iiilil  t;ct.  Srciimlh  fu  fti«heil  n»if  u>  (j^-t  m-.rr  'ln|i«  to 
urt  more  iir.fits.  It  i-*  intrrt^tinj;  f.  noft-  tint  the  \.)rwpi;i;iti.  a 
neutral  carrier,  an<l  a  ftr.iiC.M.iiial  seaman  with  jo  jK-r  cent  ni  hix 
wMit  making  ihcir  living  !>>  ^hippiii),',  with  hu  I.N.k-.)iit.  ..ti  hi, 
hijjh  prnmnnfirir'..  wa^  the  (ir^t  to  wt  the  -lituatiutt.  lie  hr«i 
arrivcil  al  tin-  >hi|iyar.l  jjatc  with  hii  nunu-v  \,ah%.  In  I'.ritain 
he  was  tiiriicti  away  Iwcium;  the  first  «Iiiplniil»liinf  rc,f»..n.."  in 
Hritain  ua^  t<»  load  up  all  yartU  with  \  .ir  vchwIv  The  S«r- 
wt'Kian.  rffu»c(!  in  I'liRlatul.  placi-.l  o.niracts  i.,r  liun.lriii-i  >,{ 
th<ni*aii<U  i<(  lull,  tif  ^hipiiiiij;  in  Atiicrican  \ariN.  an<i  later  v.Ul 
mitst  i)f  It  to  |{riti!.h  nwiier-*  at  a  harnlstjrne  pt,,tlt. 

When  the  war  lia.l  K"iie  (in  fi>r  i  year,  jiarticularlv  after  ih-- 
battle  ot  jntlan.l.  June.  l!»h;.  F  .•'  ml  rea1i^c<l  that  her  pruMeiu 
wa»  not  *tt  much  the  naval  Iwttle  as  it  wa*  pressure  tor  fV 
thipH.  I. ate  in  l!»i:.  .^he  lieuaii  to  divert  her  tiu-rKies  Imn. 
shipH  to  freiv^hters.  She  hail  early  place.l  all  her  -hipyar.U  under 
retpiiMtion  to  il.i  the  sjovcrnment's  hiddinu.  ami  as  the  need  f.  r 
ship-*  Itecariie  evei  m..re  pre^iuR.  she  multiplied  her  efforts  and 
in  l!i|7  started  in  ..n  a  lampaiRn  of  «overnnunt  owned  ship- 
yards, IniiMinR  three  in  one  district  on  the  Severn,  and  thus  hoped 
hy  l!»lH  I,,  m-t  her  merchant  ship  launchings  l>ack  to  a-  ^rcat 
a  figure  a^  ^he  had  evt  r  had. 

I'.very  shipyard  in  the  world  fK)sscs»iiif,'  shipbuilding  possibility 
was  the  >ccne  of  busy  work.  C3ccan  commerce.  I»eing  absolutely 
international,  found  all  ships  equally  acceptable,  whether  they 
were  built  in  Zealand  i  r  .\'ew  Zealand,  l.n-laiid.  or  N'ew  laiglaiui, 
Occident  or  Orient,  dl  of  which  places  are  as  a  matter  of  fact 
building  as  fast  as  they  can.  \one  built  ,hips  more  furiouslv 
than  the  Japanese  while  their  materials  I  Id  out.  Later  lapan 
had  a  very  interesting  negotiation  with  the  L'nitcd  .States,  when 
the  latter  refused  to  supply  steel  for  the  Japanese  shipyards  with- 
out return  of  s.mie  of  the  shipping  inult.  The  I'liited  State, 
shipyards  IxK.ked  themselves  ahead  with  orders  placed  at  phe- 
nomenal prices,  American,  F.ritish.  and  .Vnrwegiau  owners  en- 
larged their  orders  and  sl,ipl,uilders  stretched  their  facilities  on 
all  coasts,      len  thousand  ton  steel  steamers  were  built  even  at 


38 


INFLIENCE   OF    TflF.   GREAT    WAR    TPON    SHIPPING 


Hon^  KoiiR.'  After  oiir  entrance  into  the  war  we  added  to  the 
private  efforts  of  American  Iniiiders  the  great  plan  of  government 
yards  managed  Iw  the  L'nited  States  Shipping  Board  and  tinanced 
by  the  liiilions  of  congressional  appropriation;  this,  ten),  in  addi- 
tion to  the  hnndreds  of  ships  that  the  L'nited  States  Government 
had  contnictod  for  in  private  yards.  America  also  followed  Kng- 
lanc'"'!  example  and  reijuisitioneil  all  shipyards  to  do  the  nation's 
liiddin^.  it  is  only  France  that  has  neglected  shipbuilding,  and 
this  from  necessity.  She  has  borne  the  brunt  of  the  war,  and 
also  Inst  her  coal  fields  and  nuich  of  her  iron  industry.  'I'his 
lieinp  the  case  all  her  metal  industry  has  gone  toward  munitions 
rather  than  to  shipyards.  Some  unfinished  steamers  stood  al- 
most untouched  in  P'rench  yards  from  11)14  imtil  the  end  of  1017. 
Norway  and  Denmark,  despite  the  heavy  dependence  upon  sea 
borne  trade  and  their  relatively  large  merchant  marines,  have 
been  unable  to  s.'cure  from  either  England  or  the  L'nited  States, 
the  necessary  raw  material  to  run  their  yards  to  anything  like 
full  capacity.  The  Dutch  have  been  peculiarly  ground  between 
the  two  conL<.nding  groups  oi  combatants.  Submarines  and  home 
necessity  kept  British  and  .American  steel  from  going  into  Hol- 
land, and  while  the  Germans  had  steel  they  would  not  part  with 
it  except  under  conditions  that  redounded  to  the  benefit  of 
Germanv. 


Xo  steel  can  be  obtained  from  either  Great  Britain  or 
France,  and  the  Germans  refuse  to  export  unless  they  obtain 
certain  .specified  goods  in  return  and  also  unless  the  materials 
exported  are  used  <3nly  as  they  direct.  They  insist  on  Dutch 
shipbuilders  signing  a  contract,  valid  for  five  years  after  the 
war  is  over,  stating  that  they  will  not  sell  any  new  ship 
without  giving  Germany  the  option  of  purchase,  that  they 
will  not  allow  the  ships  they  build  to  be  employed,  directlv 
or  indirectly,  for  the  benefit  of  Germany's  present  enemies, 
and  that  no  ship  is  repaired  with  German  iron  or  steel  bv 
any  firm  on  the  Cierman  black  list.- 

'  "  The  Hong  Konu  yards  are  now  building  ships  in  competition  with  the 
shipyards  of  Europe,  and  are  buil<li!iK  them  as  cheaplv  as  tlie  cheapest." 
7/,r   I'.coiionii,-  l'',>rlj.  |-"et.riiarv   12.   \^\U.  \i.  J(K);  also  H'all  Slr,\-t  Journal 

-  (Jliisyozc  Hcrjid.  December  29,   1^17,  p.  io. 


THE    SHIPPING    INDL'STRY    DURING   THE    WAR 


39 


Spain  was  more  fortunately  placed.  She  could  trade.  She 
had  l)eds  of  precious  hematite  ore  without  which  English  steel 
mills  could  not  meet  the  needs  of  war  industry.  With  the  power 
of  emiiargo  on  this  ore,  Spain  could  jjet  what  supplies  she  needed 
for  her  few  shipyards,  which  arc  as  busy  as  any  yards. 

Despite  these  worldwitle  efforts  at  rebuilding,  it  is  well  known 
that  even  yet  (May,  lOLS)  the  total  world  output  is  less  than 
submarine  sinkings,  and  the  problem  of  the  tonnage  supply  is 
becoming  ever  more  acute. 

The  results  of  this  ever  increasing  shortage  of  shipping  supply, 
and  the  ever  increasing  scope  of  the  world  war,  have  placed  upon 
the  Entente  countries  as  well  as  upon  neutrals,  most  unimagined 
necessities  for  economic  and  commercial  readjustments  along  the 
line  of  do-without.  The  nations  are  in  a  situation  much  like 
that  of  Jules  Verne's  ship  in  which  his  globe-trotting  hero  crossed 
the  Pacific  on  that  record  journey  around  the  world  in  eighty 
days.  IJefore  reaching  San  Francisco  the  coal  ran  out,  so  they 
burned  the  furniture,  the  superstructure,  the  upper  deck,  and 
finally  reached  port  with  the  vessel  cut  down  almost  to  the  water's 
edge,  but  still  floating,  still  steaming,  although  she  was  consuming 
herself  as  she  went. 

Faced  by  similar  necessities,  governments  have  seized  upon 
industry  with  the  merciless  grasp  of  the  drowning  man.  Ship- 
ping was  one  of  the  first  to  be  subjected  to  national  need. 

Government  Control  of  Ocean  Freight  Rates 


The  combination  of  all  these  factors — reduced  shipping,  in- 
creased demands  for  freight,  decreased  efficiency  of  existing 
shipping — has  made  possible  the  piratical  rates  which  ship- 
owners have  been  able  to  ask  and  receive.  Britain,  living  a^ 
she  does  upon  sea  borne  goods,  has  shielded  herself  in  part  from 
these  financial  exactions  by  a  policy  of  government  control  of 
shipping  which  has  been  steadily  increasing  from  the  small  be- 
ginnings of  her  early  requisitions  to  almost  complete  control.  .\ 
week   after   the   war  started   there   was   a   royal  proclamation 


40 


INKl.lKNCi:    Kl-    Tilt:    (JHKAT    \V\I<    ll'dX    SUirMVC, 


(Aiitjiist  7.    li'in   aiin.itiiiciii^'  tlie  policy  cf  rcqiiisitidiiinp  of 
!-liil)>.      I'luTi'  is  .if  Course  luitliiiij;  new  in  this,      [n  the  ]>riiccss 
uf  re.iL;i>teriiii,'  uiuWr  a  llaj;.  \irtiially  all  nations  make  iirovi>ious 
uhcreliy.  witliont  (inotion.  the  ship  f;oes  into  the  service  of  the 
nation  iiiuier  reaMinahie  terms  of  compensation  at  the  time  of 
national  need.     l"<ir  a  time  the  I'.ritish  (ioveniment.  in  the  time 
<  f  ship  depression  at  the  openin.L;  of  tlie  war.  went  int(j  tlie  open 
ni.irket  and  took  .ships  as  any  other  charterer.      Then  when  the 
\\:\r  >-ettle(l  down  for  a  lon.i^  struKKlc,  there  was  estahlished  the 
much  controverted  scale  of  rates  spoken  of  in  liitterncss  as  the 
l!Ine    I'.ook   rates— a  complicated   scale  of   prices  dependini,'  on 
character,   e(|uipment.   size,   speed,   etc.,   <.f   the  vessels.       These 
rates,  made  in  Octoher,  I  ill  I.  were  fair  rates  in  the  ship  market 
as  it  then  existed.     They  provided  f(.r  fair  income  on  the  ship 
at  its  value  at  that  time,  or  at  its  previons  value.     [?nt  as  the 
war  went  on  the  rate  of  the  ship  free  to  hargain  rose  week  hy 
week  .dmost  without  limitation,  as  previously  stated.     That  left 
the  British  shipowner  in  the  nnhapjjy  position  of  seeing  the  neu- 
tral ship  or  the  unrerpiisitioned  I'.ritish  ship  earning,  first,  douhle 
the  hire  he  wa-  reccivint,'  for  his  requisitioned  ship,  then  triple, 
then  (juadruple.     I-inaily  the  static  Uluc  P.ook  rates  hecame  one- 
•Mxth  or  one-seventh  of  tlie  am.iunt  the  Uritisli  ('.overnment  itself 
was  compelled  to  pa\-  to  get  a  neutral  ship  t.j  meet  some  of  its 
needs.     In  order  to  distrihute  this  Inirden  of  mixed  earninj,'s  with 
some  degree  of  fairness,  there  was  estahlishcd  a  policv  of  taking 
a  certain  proportion  of  the  shipping  of  a  particular  company, 
anning  to  leave  all  owners  ahout  the  same  proportion  of  their 
fleets  free  to  reap  the   f;it  harvests  of  the  high  seas.      Some 
owners,  however,  complained  that  this  distribution  of  requisition- 
ing was  very  unfairly  handled,  some  people  having  nearly  all 
their  ships  free,  others  having  nearly  all  their  ships  taken.''    In 
order  to  prevent  undue  competition  of  the  various  Allies  with 
e;.ch  other  in  the  ship  market,  and  in  order  the  hetter  to  utilize 
the  existing  tonnage,  there  was  formed  an  interallied  charterinjr 


,,  ,'.''^vd".v  U\\-k!y.  about  January,  19ir,.     Review  of  shipping  for  the  year 


TIIK    SIIIPI'INC    INDISTKY    DIRINC    Till:    U  AK  41 

hoard  wliicli  juit  uikIit  mic  liaiid  the  task  til  sccuriiij;  .sliip-.  fur 
all  tlie  luirupcan  Alhcs.  The  nianaptnu-m  of  ships  was  in  Uc- 
tciiilifv.  1!"li!,  hn)ii),'ht  from  various  liaiids  in  the  War  Dcpart- 
nieiit  and  the  .\(hniralty  under  the  hands  of  a  new  tiflicial,  the 
shijjping  controller,  Sir  Joseph  Maclay.  an  experienced  ship- 
owner tnider  \vini>e  administration  the  Iiitter  complaints  of  ania- 
leiir  inefticiency  have  declined. 

The  proportion  of  liritish  ships  under  re(|uisition  at  I'due  Hook 
rates  by  the  jjovcmment  has  steadily  increased,  until  hy  the 
middle  of  I'JIT  it  became  IdO  per  cent  of  all  ships  above  "'<>(» 
tons. 

The  United  States.  Holland,  ami  nearly  all  other  countries 
have  been  compelled  similarly  to  control  at  least  that  part  of 
the  national  licet  that  was  meetiiiK  the  national  needs. 

British  Control  of  Shipping  through  Co.\l  Scpply 

N'ot  only  have  the  British  taken  100  per  cent  of  their  own 
shipping,  but  by  a  quiet  and  judicious  application  of  the  primal 
force  of  might,  they  have  succeeded  in  getting  considerable 
amounts  of  neutral  shipping  as  well.  The  only  coal  to  be  had 
in  the  maritime  world  of  Europe  and  .\frica  is  British.  The 
shores  of  the  Mediterranean  have  no  coal,  save  Spair's,  and  her 
supply  is  only  a  fraction  of  the  home  needs.  France  is  in  a  coal 
famine.  The  German,  Belgian,  and  Russian  supplies  are  shut 
off  by  tb.  •.  Japan  is  too  far  away  to  play  much  of  a  part. 
The  p-    •  move  food,  munitions,  and  raw  materials,  almost 

shut  on  •  .-lean  coal,  which  had  had  a  short  Ixjom  in  the  early 
months  le  war;  and  so  Britain,  the  dominant  source  of 

supply,  has  been  virtually  in  a  position  to  dictate  what  ships 
should  get  the  coal  that  she  shipped  with  such  effort.  When  the 
Danish  shipowner  ran  his  vessel  into  a  British  coaling  station  in 
South  Africa,  or  the  Suez  Canal,  or  England  herself,  there  was 
a  fine  opportunity  for  a  bargain.  The  British  hand  was  strong. 
Why  should  she  give  coal  to  the  neutral  with  his  piratic  rates 
when  she  so  sorely  needed  it  for  herself  and  her  allies?    There 


42 


INFLfKNlK    OF    TIIK    CHEAT    WAR    IPON    SHirriNl. 


is  ni)  p)0(l  answer.  Therefore  many  a  foreign  shipowner  got 
coal  only  on  condition  nf  taking  a  cargo  to  !5ritain  or  liiring  a 
proportion  of  his  tlcet  to  the  British  (iovennnent.  The  case  is 
txactiv  analogous  to  the  Japanese  attempt  to  get  American  >tcel, 
and  the  American  attempt  to  trade  food  for  Diitcli  and  Nor- 
wegian shipping. 


National  \alle  of  Britain's  Big  Merchant  Marine 

Britain  may  Ik?  said  to  have  heen  saved  thus  far  by  her  huge 
and  far  llung  tleet.  Not  only  was  she  carrying  her  own  trade, 
hilt  also  that  of  many  a  neutral  as  well.  These  ships  have  l)een 
called  into  service  of  the  mother  country  one  hy  one.  For 
example,  an  .\merican  firm  of  exporting  merchants  operated  their 
own  ships  and  ran  a  steamship  line  from  New  York  to  western 
South  .America.  While  the  vessels  belonged  to  American  capi- 
talists with  hcadcpiartcrs  in  New  York,  they  were  registered 
under  the  British  rtag  Ijecauso  it  permitted  them  to  be  bought 
more  cheaply  and  run  more  cheaply  than  under  the  .\merican 
flag.'  They  were  technically  owned  by  a  British  corporation 
with  headquarters  in  London — a  subsidiary  of  the  .American 
corporation.  For  many  years  the\  effectively  served  trade  l)e- 
tween  the  United  States  and  western  South  .\merica,  but  Britain 
found  need  to  use  all  British  ships,  and  these  were  British  ships, 
and  so  one  by  one,  on  due  notice,  the  vessels  were  called  in  be- 
tween July,  l'.)10,  and  July,  1017. 

'  From  the  standpoint  of  profits,  the  .American  owners  had  staked  their 
mor.cv  on  the  wrong  horse.  They  would  have  been  millions  of  dollars  richer 
had  they  elected  Norwcpian  registry  rather  than  British,  because  it  happened 
to  remain  neutral,  and  they  would  not  have  been  compelled  to  go  into  the 
open  market  and  bid  for  such  shipping  as  was  available  at  the  almost  pro- 
hibitive rates  then  existing.  They  were  unable  to  secure  anything  but  slow 
tramp  steamers  unsatisfactory  for  the  purpose,  but  the  best  to  be  had.  The 
International  Mercantile  Marine  is  another  company  partly  .American  with 
vessels  unde'  the  British  flag,  which  has  lost  enormous  possible  earnings 
during  the  period  of  our  neutrality  when  vessels  of  .\merica  or  other  neutral 
registry  were  able  to  reap  the  full  profits  of  the  high  sea  rates  while  the 
British  vessels  such  as  those  of  the  International  Mercantile  Marine  were 
controlled  by  the  British  Government.  There  was  enough  of  profit,  however, 
left  to  the  British  liner  to  enable  the  International  Mercantile  Marine  to 
make  good  its  watered  stock,  of  which  it  had  small  hope  in  an  era  of  peace 
and  competition. 


THE   SHIPPING    INIHSTRY    RfRINC.    THE    WAR 


43 


TiiK  Disturbance  and  Limitation  of  International  Trade 

Ueniotc  indeed  is  the  habitation  of  the  human  Ijcing  whose 
tlaily  life  has  nut  been  at  some  jniint  pinched  by  the  trade  eml)ar- 
rassments  that  have  resulted  partly  from  the  limitations  of  pro- 
duction due  to  the  war.  but  more  because  of  the  ship  shortage, 
in  a  short  time  after  the  war  started,  the  cessation  of  experts 
from  -\r{jentina  had  so  disturbed  employment  in  Buenos  Aires 
that  people  stood  in  bread  lines  waiting  for  the  doles  of  charity. 
The  cessation  of  the  purchase  of  cotton  made  for  a  season  a 
low  price  and  great  depression  in  the  southern  United  States. 
.\s  the  war  went  lU.  goods  for  export  piled  up  upon  the  piers 
in  almost  every  land,  especially  in  distant  continents  to  which 
it  iHJcame  ever  more  difticult  to  send  the  ships.  Thus  we  now 
hear  of  nearly  a  million  tons  of  sugar  waiting  in  Java,  and  from 
t\vo  to  three  hundred  million  bushels  of  wheat  in  far  away 
Australia  hopelessly  beyond  the  reach  of  hungry  Europe.  In 
the  spring  of  1!>10  even  so  valjable  a  commodity  as  wool  waited 
in  the  New  Zealand  warehouses,  to  the  embarrassment  of  farmer 
and  trader,  liecause  ships  were  not  available  to  carry  even  this 
commodity,  worth  hundreds  of  dollars  per  ton. 

The  trade  situation  offered  two  dangers  to  the  .\llied  peoples, 
and  these  made  two  strong  reasons  for  rigid  control  of  trade  by 
government.  The  first  of  these  dangers  was  that  of  strengthen- 
ing the  enemy  by  indirect  trade.  This  flourished  at  a  lively  rate 
for  many  months  through  neutral  countries,  especially  Holland 
and  Scandinavia.  It  was  because  of  this  that  the  British  policy 
of  licensing  particular  shipments  before  they  could  be  permitted 
to  go  overseas  was  begun.  The  licensing  began  with  coal  and 
food,  but  its  scope  gradually  widened  under  the  two  pressures — 
fear  of  supplying  the  enemy,  and  home  needs.  With  the  decline 
of  shipping  and  the  impossibility  of  meeting  all  the  demands  of 
trade  it  became  necessary  for  the  government  to  say  which  ship- 
ment was  neces.sary  and  must  have  precedence  over  others  which 
could  wait.  Closely  akin  to  this  was  the  similar  c.  ■  '"-ol  of 
iihiustry,  a  control  that  involved  again  the  application  of  the 


4i 


i\i-i.ii:\cK  or  tiif:  t.rfat  w  \u  ivns  siiippino 


cciiH-cpt  nf  proatcr  relative  necessity  ami  therefore  i<(  priority  ..f 
sitpplv  or  opportniiiiy.  Should  tlii>  man  l.e  pennittid  to  Iniikl 
a  new  aiitoiiiohile  tact  '  I'lic  answer  niii-i  l.e  j;iven  in  terms 
of  the  relation  ..f  tlu-  ..nl  to  war.  If  war  needs  automohiles, 
ihe.\  may  he  made.  If  it  doe-^  not  nee.j  them,  thev  can  not  he 
made.  Snch  i^  the  llriti,h  answer.  This  worked  around  ratlier 
i-apidlx  1  .  the  i.ojnt  where  Hritain  was  eontrollin(,'  not  only  im- 
|i..rts  ,md  esporis,  l,m  the  estahlishment  of  new  enterprises,  and 
the  en'.irfiement  of  old  enterprises. 

.VeM  came  thf  jirevemion  of  nndue  pniliieerin;,'  in  industry  as 
It  h.id  iven  cheeked  in  shippin.v;,  until  I'.ritain  worked  .iMund  to 
:1k  p-i'it  where  the  ijovernment  is  a  larye  price  .oniroller  an,l 
virtually  the  ..nly  imp-rur.  .Ml  ships  are  hein«  operated  as  the 
government  orders,  to  carry  the  goods  that  i;overnment  orders,  at 
rates  liie  },'ovcrnment  onlers. 


I.MilSTKI.M,    !\!;\l)jrSTMrvT.S 

Xmnerous  readin^tments  have  heen  made  with  the  ohjcct  of 
mcreasjnj;  the  directness  hv  which  national  encri;v  shall  focu- 
on  the  war.  .and  especially  on  shiplnnl.linj,r.  d'he  war  has 
heconie  a  striig-le  in  which  every  man,  woman,  and  child  par- 
ticipates in  s,,me  de.-ree-a  strn-;,ir|e  in  which  everv  hour  of 
work.  ever>  pare  of  material  h.as  a  hearin.u.  .Shippin-  hccomes 
a  pan  ot  ail  lr,in^p,.riation.  s,,  all  transportation  mu^t  he  con- 
tnlled  and  sy,tem,iti/ed  in  the  interests  of  eiliciencv.  Ship- 
huddnn;  l.cc.mes  a  part  or  all  manuf.acturin-  It  t,,o'  must  he 
contn  lied  alou^'  with  .all  its  materials. 

1""  -iniplify  the  railroad's  work,  llritain  has  heen  districte.l 
s..  that  certam  c.d  mines  shall  -upply  the  markets  nearest  them 
Ihe  ..'nustrv  ,„  Muniti,  ns  has  taken  .al.solnte  cntrol  „t  the 
•r.  n  mdustrrs  .-.ud  di-trihutes  this  t-.iaterial  to  meet  the  mo-t 
pve-.;-'  n.e.ls  nf  ,he  nation,  namely,  ships  and  munitions.  In 
;ne  miere-ts  ,,;  increa-in-  shipyard  eftlciencv.  the  .\<lmiraltv 
early  e-tahhdied  committees  in  e.ach  shiphuildin.ir  reijion  to 
vxpedite   Innldm.t:   in   every   possible   wav.      The.se   committees 


Till.    SllllM'INi.    INULSrHV    IIURINT.    TIIK    W  AK 


45 


consist  ttl"  ctij{iiicers.  hiiiltlcrs,  material  men.  and  others  cf)n- 
versaiit  witli  tlie  various  needs  of  tlie  trade.  Tlic  army  was 
eunil)ed  out  to  lirinj;  liack  to  industry  men  particularly  needeil 
at  >tratej;ic  points,  in  shipyar<ts  and  machine  ^hops.  In  May. 
HUT,  the  shipliiii!ilin(,'  and  snppl\  vork  of  the  .\dmiralty  and 
War  Otiice  and  .Ministry  of  Sliippin;,,'  was  co- Ttlinated  jjy  bein;; 
placed  under  the  sin},'Ie  hand  of  .Sir  l.ric  (iedde-.' 

In  tile  attenipts  to  increase  the  \:\\x>r  su|)ply  women  hy  the 
tlinii-aiuls  have  taken  up  shiphulldiiiLr  work  and  are  doint;  .i 
siir]iri>in^  variety  of  operations  which  before  hail  been  eon- 
siderid  as  the  exclusive  tasks  of  men. 


Amkuka  I'm. Lows  IJitnisii  I'.xami'li:  in  War  Or(;anization 

.America  ha>  felt  the  <aine  jirosure  that  lias  st|ueezed  luirope, 
bill  we  h.i\e  tell  it  nuich  less  because  we  have  done  less  in  the 
war,  and  because  we  are  less  dependent  on  tra<le,  owinj^  to  our 
iui}je  natural  resources,  our  e.\tensi\e  mamifacttnes,  and  the 
eonii)lcteness  of  our  manufacturing  and  agricultural  industries. 
In  -pite  of  all  these  riches,  we  felt,  eve.i  as  neutrals,  the  ever 
increa!<iiijj  pressure  of  ]ii,i;h  freij^hts.  high  prices,  and  occasional 
shortages,  which  were  acute  only  in  the  two  important  com- 
modities of  potash  and  dyestnlTs.  L'pon  our  entrance  into  the 
war,  however,  our  condition^  more  nearly  resembled  those  of 
the  European  countries,  and  we  have  promptly  copied  many  of 
their  devices. 

We  l<cgaii  with  the  export  licensin;.^,  bv  which  we  attempted 
to  Control  the  shipment  of  goods  to  Germany  through  the  neu- 
tral countries,  especially  Holland  and  Scandinavia.  This  policy 
took  the  form  ',)f  almost  complete  prohiljition  of  e.xport  to  these 
regi'Ois.  A  spectacular  episode  was  sixty  Diitcli  steamships  lying 
li.ailtd  in  ?\ew  \'ork  harbor  for  montiis  betwee'.  .\ugust.  HUT. 
and  midwinter,  I'.H"'.  There  they  lay  despite  the  fact  that  each 
one  of  them  was  worth  tlu)Usantls  of  dollars  a  day  upon  the 
high  seas,  to  wliich  they  finally  went  as  a  result  of  e.xtended 
negotiations:  but  they  went  under  charter  to  the  United  State;. 

'  Lh.yd's  ll\-ckl:.:  May  18,  1017. 


4U 


IXFLl'KNCK    llF    TIIK    URKA T    WAR    IPON    -lIlPPINr, 


(kivcrnnicnt  to  serve  'Hir  coasting  tratli-  .md  our  Sovith  Ameri- 
can trade.     Their  car};i)e>.  were  enten  in  America. 

Tile  Xnrwejjians  had  the  distinguished  Dr.  Xanscn  here  fur 
months  in  the  attempt  to  get  food,  but  we  wanted  somethinR  in 
return.  N'ansen  claiineil  that  the  American  (iovcrnments  con- 
ditions. Xorwefirian  shipping  in  return  for  food,  were  t<x) 
onerous,  so  we  had  practical  prohibition  of  trade  with  Xorvvay 
for  a  consideral)Ie  period  of  time,  after  which  they  got  hungry 
(sec  Chapter  1\  )  and  a  bargain  was  re.iched. 

The  .American  Government  also  copied  tlie  pohcy  of  (Ireat 
Mritain  l)y  requisitioning  all  .American  ships  (Octolwr,  I'.UT) 
aJKive  L', ."»(•()  tons  dead-weight  carrying  capacity.  In  this  respect 
we  also  followed  the  Mnglish  example,  particularly  in  the  case  of 
line  vessels,  by  immediately  han<ling  the  vessels  back  to  the  old 
owners  to  operate,  but  on  government  account,  thus  giving  the 
government  complete  control  over  where  they  went,  what  they 
carried,  and  the  part  they  would  play  in  war  and  in  meeting 
national  needs. 

.American  railway  congestion,  and  port  congestion,  resulting 
shortage  of  supplies  of  coal  and  many  other  commodities,  have 
brought  home  to  .America  .some  realization  of  the  fact  that  the 
numerous  independent  enterprises  that  have  resulted  from  'ur 
individualistic  system  of  industry  and  trade  are  really  inelticient 
and  wasteful,  as  an  examination  of  industry  in  war  countries 
clearly  shows.  The  whole  of  the  world  commerce  has  Wen  a 
great  crisscross  much  like  what  the  trade  in  California  oranges 
used  to  be  during  the  period  of  individualistic  independence. 
.At  that  time  a  city  like  Chicago  might  receive  fifteen  cars  all 
in  one  morning,  and  Milwaukee  none;  v.hereas  the  next  day 
Milwaukee  nu'ght  receive  ten  cars  and  Chicago  three,  resulting 
in  starving  and  glutting  of  markets  and  extra  moving  of  cars 
tt.  places  where  they  were  desired.  .\1I  tin's  waste  of  oranges 
and  waste  movement  of  oranges  has  been  eliminated  by  putting 
their  marketing  in  the  hands  of  one  association  v  liicli  surveys 
the  tiekl  and  sends  the  oranges  direct  to  the  places  that  want 
them. 


THE    SHIPPING    INDUSTRY    DURING   THE    WAR  4| 

A  similar  simplification  of  national  and  international  trade, 
first  worked  niit  u>  some  degree  in  (iermany.  is  a  necessity 
which  the  war  has  been  step  by  step  forcing  upon  the  Allicil 
nations.  Many  interesting  readjustments  have  already  occurred 
in  the  L'nitetl  Stales.  An  illuminating  example  is  furnished  by 
the  Tide-Water  Coal  Exchange  operating  in  the  coal  exjwjrting 
ports  of  New  York,  Philadelphia.  Baltimore.  Norfolk,  and  Cleve- 
land. They  claim  to  have  reduced  the  average  lie-over  of  loaded 
coal  cars  in  Philadelphia  from  aliout  eight  days  to  about  three 
days,  by  the  elimination  of  individual  enterprises  through  co- 
ordination that  results  in  the  simple  practice  of  pooling.  It 
appears  that  it  has  lieen  the  practice  in  Philadelphia,  for 
example,  for  conipan)  .\  to  load  a  l,.")0(»  ton  barge  of  coal  of 
a  certain  grade  for  shipment  to  New  England.  This  1,.jOO 
tons  re<]uires  .50  cars  of  ')<>  tons  each.  The  company  would 
have  four  or  five  cars  of  a  certain  kind  of  coal  arriving  today, 
a  few  tomorrow,  a  few  the  next  day,  until  finally  it  would  have 
.■>0  cars  in  port  and  would  then  proceed  to  load  the  large.  Mean- 
while company  B  was  doing  exactly  the  same  thing,  as  were 
company  C.  company  D.  and  company  E.  The  coal  exchange 
pools  all  this  business.  If  company  .\  has  a  l)arge  of  a  certain 
kind  of  coal  to  ship,  and  all  five  companies  together  have  enough 
cars  of  that  grade  of  coal  in  port,  it  is  dumped  into  that  barge 
and  the  cars  sent  back  to  the  mines.  The  next  day  company 
B's  barge  is  loaded  and  the  next  day  company  C's.  In  each  case 
every  company  gets  exact  credit  for  all  the  cars  it  shi|)s.  but  the 
lie-over  has  been  reduced  by  many  days  and  the  coal  cars,  yard 
space,  and  pier  space  are  cleared  for  work  instead  of  l)eing  used 
for  congestive  storage.  This  is  a  small  but  admirable  illustration 
of  what  M.  .\ugagneur.  Ex-Minister  of  French  Marine,  .said  in 
discussing  port  congestion  and  marine  transportation : 


Arrange  for  the  close  coordination  of  land  and  sea  transport, 
give  the  Ministry  of  Marine  entire  control  of  the  ports,  for 
it  knows  all  their  needs  better  than  the  Ministry  of  i'ublic 
Works,  and.  finally,  arrange  your  arrivals  in  such  a  manner 
as  not  to  leave  a  port  empty  for  1.")  days  and  then  have  three 


4tt         iNri-i-ENCK  or  the  ghv..st  w\k  i  i'on  simi'imnm; 

boat"*  arriving  each  ilav.  Then  >r)u  vsill  stc  thru  freight 
rates  will  pi  Wciwtj.  It  vivtsrls  are  ti>  di'xliarjji"  raimlly 
iat»>rer-«  are  iUTeo'«.ir\  It  i^,  therelnro,  iti(li-|)tn>al)lc  to  rp- 
liM>c  the  (Itukers  wliu  have  Iwen  nuihili/ed.' 

in  the  application  of  thi^  proee^ts  we  hau-  I'nnnd  it  (ie-tiraMe  in 
tlii-  iiiuntrv  In  estaliiish  war  |Mirt  Ix.ariU  iluit  can  ltM>k  i>vcr  the 
wlu.Je  pnrt  rather  iluii  let  eaih  ciinipaii>  wnrk  iti  it'*  own  iiule- 
lanileiit  way,  and  late  in  Jaiuiarv,  I'.'l^.  the  CfinKCstion  nf  the 
purt  III  New-  Snrk  hid  liecmne  s<>  kul,  due  to  the  inability  to 
tran-ifer  fjoods  from  car-*  to  wareluni^e,  anil  frotn  warehouse 
to  ship  that  a  committee  of  tNpert>  coni|io>ed  of  two  American 
•*liip|)inK  men  and  one  representative  of  the  i'.ritish  Ailnnralty 
was  ajipointetl  to  the  work  of  connlinatinj;  the  various  Atlantic 
ports.  They  order  -hips  to  the  place*  where  they  can  he  loaded 
most  expeditiously  Iwcausc  they  lind  it  saves  time  to  >en(l  a 
vessel  on  to  Philadelphia,  iJaltiniorc.  or  Norfolk,  rather  than  let 
her  lie  for  days  at  New  York  waiting  for  a  chance  for  her  carj;o 
to  k-  dun  "Ht  of  a  hcjjK'less  mass  of  cars  on  the  hundreds  of  miles 
of  tnicks  surrouniliny;  that  terminal. 

This  is  very  similar  to  tlie  action  of  the  Lake  Carrier-  .\sso- 
ciatioii,  .Vi/vemkr,  I'.MT.  who  vrjted  to  mobilize  the  lake  licet* 
and  put  them  all  in  charge  of  one  committee  with  power  to  order 
their  tii.>\ements  niakinj:  the  greatest  possible  expedition  and 
least  waste  of  time. 

It  is  unfortunate  that  the  world's  -hipiiini,'  -ituation  could  not 
have  receive<l  early  the  benelit  of  a  more  tiiorougii  ortjanization 
of  .\meric.ui  anil  Allied  re-ources  nioviu!,'  towanl  the  elimination 
of  useless  niofinii.  the  reduction  of  eltort  on  non-essential  indus- 
tries, and  the  focusinp  of  national  etier^'v  ,,ri  the  vital  poiiu  if 
shippiiijj.  The  steps  that  have  been  taken  toward  this  end  will 
lie  explained  in  some  detail  in  ensuing  chapters. 


I-l-yd'i  .'(V.7,7v.  January  7,  !"ir,.  ,,,  14. 


CHAPTER  in 

The  Effects  of  the  War  on  Marine  Insurance 


DeI'EXMKMK    ok    TrAUK    UN     MaHINK    InSI  KANIK 

DnriiiK  tlit-  ti'^t  wtt'k  nf  AuRiHt.  IIMI,  vcssds  of  all  nation*, 
luiitraU  an  well  .'s  lK'lli>{i'rcnt.x,  were  heM  in  jxirt  as  effectively 
a>  it  the  lleet  ni  (it.'at  Mrilaiii  nr  all  the  •>iil>iiiariiies  nf  (ierinany 
were  Ivinu  in  wait  jii>t  <  iit'^ide  the  harhor  hnlit^. 

What  ha<l  caii-e<l  this  virtual  lilockaclc?  An  answer  is  to  he 
louml  in  the  lailure  nf  marine  in>urance  tacilitic*  to  meet  the 
enuTH'eiicy.  Ihe  vc»eK  could  not  lie  in-uretl.  liennan  raiders 
were  operating;  in  all  svas  appearinjj  where  least  exjiected.  Ihe 
Hritish  lleet  was  making  every  effort  to  cut  ott  the  trade  of  the 
C'entr:d  Powers.  IJut  these  increa«ed  ri>I>  were  not  sufticieiitly 
•t  at  to  |)revent  vessels  t'roni  \enturiii;;  from  port  providinvj 
ailetjuate  insurance  on  hull  and  car>;o  could  he  secured,  lint 
such  protection  was  not  available.  The  very  foundation^  of  the 
rnarnic  insurance  Inisiness  had  liecn  swept  away.  I'nilerwriters 
faceil  conditions  that  were  strange  t.)  them.  What  was  the  ri>k 
to  lie  met'  Mow  was  the  amount  of  the  premium  to  he  deter- 
mined? WIkI''  was  the  neces>ary  capital  to  meet  the  increa-^cd 
demands  for  insurance  to  lie  secured?  For  tnany  days  tluie  ivas 
no  marine  insurance  market.  \'essels  -.ould  only  In-  injured  at 
excessive  premiums  which  shippers  and'>hipowners  reiu>ed  to 
j)ay.     The  cessation  of  commerce  re     "    d. 

The  L'niteil  States,  though  not  eii};..,;ed  in  the  Muropcan  War, 
sutTered  !.;reatl\  from  a  coii.qcstion  of  c mimoditios  produced  m 
lar^e  part  for  the  export  trade,  in  the  s.mthern  States  an  ini- 
meii'e  crop,  of  cotton  had  lieen  raised  for  the  Ivnglish  and  (ier- 
man  mills.  With  the  cutting  olT  of  all  marine  insurance  facilities. 
the  planters  were  with mt  :    I'larkct.     No  cotti  )  was  exported; 

40 


.'•0 


IVrtlKMCE   or    fHI'.   CUK.St    W  vf 


ft  IS 


'Pl'fxlj 


pricr»  fell;  ihr  cotfu..  j»r«Mluccr«  liutil  mm.     I'-i  >.i\i   ilu-  'iitu*- 
ti"ii  apjwaU  »\rr«'  Jinally  «riU  ti>  Cofi({re»». 

Ill  m.t«f  III'  tlir  ciitintric*  i»f  l!«n»pc.  the  financial  nwrl  i«  were 
clu-tcil  with  tin-  ikTlaratii.n  >»(  war  un  S<:rl)ia  '  ,  v  i.tru  f  hirr 
\va<  a  rti«h  mi  the  (»art  .>r  the  |»anic*trjrkrn  h.KUi  >'  -.  ruritie- 
altr..a<l  fn  onvt-rt  their  holilinRx  into  roIiI  in  I'u-  >,p't,  u  u-rkan 
inarkt'tt.  There  \\a-  the  |K>s»il)ilitv  ».f  the  1 1  nl  Sf..!t  lieint 
•Irainetl  of  itn -ttipply  nf  gold,  lint  cnniparat  \  li;'  .•.'I'  left 
tlu-  country  Insurance  couM  imt  U-  -.ectire*!,  k  uIiI  c.  i  re<l 
■  Illy  at  •.ticli  ImkH  rati-,  that  u  wa*  ini|xi**il'le  t.,  i  m»i-  ,,irjent.v 
Oil  jiilv  .Ml,  l'M».  the  marine  in*urance  utnler  riicr«  s"  »w 
\"rk  met  and  adv.iiKed  their  rates   i<ir  «ar  risk-  it!  •  r:i!i.-e     n 

J-nld    fr.mi    *l.l'.Vl>    to   lii:..lMMI     |,,f    iviTV    *l.O(H».0<MI    „t    -old     M- 

•tiretl.  * 

( >ii  the  "IK'  hand  i!ie  lack  o|  i.:arine  insiiranit  >,eri>niM^  mjiiri.' 
the  conunertr  ot  the  Ltiited  States,  ami  on  the  other  it  jwrhaji 
preventetj  .1  tiiwncial  |»anic      IJoth  casi-,  however,  ■dum    \h,\\ 
tleptiulent  the  trade  of  the  C()untr>  is  uptm  marine  insurance. 

Dk.VII.OPMIM    oj    MaKI.NK    In>I  K.WtK   IN    Ksr.i.wt. 

Marine  insurancf.  this  all  pouiriii!  aid  oi  commerce,  i  .  as 
the  LriRlish  put  it.  an  ancient  and  honorable  institution.  It  has 
existeil  siiue  the  very  heninnin),'  of  trade  by  water  rontev  in 
liiiKJaiid.  the  marine  insurance  Imsnuss  was  carried  <,ii  , nt;- 
iiially  l>y  men  called  i..Hlerwritcrs.  Hie  capital  of  each  'ii'der- 
wriicr  wa^  >nia!l.  niul  the  noimt  of  his  luminess  liiu-ted 
Several  nnderwritcr  suhscrilied  to  cover  the  risk  on  ,1  ■.im;lc 
vessel.  Ihirinj,'  the  >evi nfii'nth  century  sea  captain-,  and  trader, 
nut  .It  the  cotTce  housi  ,,f  Lloyd's  in  London  and  t..  them  < ntu- 
ilu-  utuk-writers  '..r  the  ir,irp..>e  of  nnderwritinp  the  nd*-  up-n 
voyajje-  aU.ut  lo  l«  k--nn.  Thus  wa-  founded  the  great  as- 
sociation of  l.lox.l's,  Hnj,dand\  insurance  center.  !  :ter  it  lo>f 
it',  identity  as  a  cotfee  Iiouve  and  hecanie  purely  a^i  :n>iiraiice 
e\chaii.^e.     It  should  \k  understood   that   Lloyd's  is  n-i  an  in- 

'  XiU'  ink  Jiimiiil  of  Comnurce,  July  .?().  I»)14. 


■mnp 


m 


ry 


niK    KKH 


i*i 


H,f'     ■*  Mf    t'^'    \»A»5lNl      ivM-li\«*CR 


5t 


Dstiraitci   .ii»wi       I  lie;   •»' 

)^ni««  Mf  corjK»iaiM>»»  I 
marine  in'«iir;>ncr  i  M»in« 


fit^e   Hhrre  writer^  <>f  all   Kiml*  f>( 

vtrr  riil-'^  «lr  wii  \-\>  for  th« 

„    ii.  ^fMWtlt  ot  the  liirge  c*>in- 

••n      lit    Uit*^"»l  lU    «1ijpniei  i  <»f  tli** 

in   I'.iiK'  >h1.      -M   the  pTi     nt  tim*- 


irliwl   111    r^w    KnK  i  h   niMrJlf    tn^nr     ut 


carfwil.   ■        li'    th< 
svwh  .1.  Olf     -TitUh        !  l-'cr  the    "i.^nh iity,  I'm.iti. 


tnriinii  '    i»t»i''"       ' 
tci  ilqirml      wn 
aiii'iunl  <ii      yjixv^      ir.  -u 
L'liitiil  Si         prii'f 
%vaj    1^  in      i'-4,'lan>        l 

lie  |»*ivate  uii'ltrw-  :ter^ 
risk  .       ■■  vessel      Mail 
I'erniit  •  i  In    '^wi'  i-i»nrr« 
Irtisini       t'i«  have  ava 

.irr  I  IV     var,        i»'r*='ai 
with  (lie     nwrican  i 


Uriteri 

Mtitf    iti 


=AN' 


TK»>  SrATE* 


ol 


h        Mad 

.rry  ll.  >.     Tl.  a» 

Itv  ic  c  mI^ntlie^  no 

V     N  Cfti'     'I  in  inmli  the     'itic 

fhc  iarKC  C(ii!.|)anies  ami  al>«> 

'  -i-rilii«jr  to  only  ;t  part  oi  the 

le  I  re  tn'«urancf  conijianic^  were 

tiitraRc  in  'he  marine  insi./ancc 

thcm-<lvf<  of  ihf  priv  '>>;«•      He- 

i-  itr^urance  was  on  an  ctjtiality 

..IT- 


Mr.iMws 


Wsv 


!)Hi     NAKY    MaRINI.    I  VSfRANCE 


i<lerst.i       thr  mO   ence  i>l  the  war  iifM»ti  marine  insurance 
!ra       i  tlistiiu  ."tt  l>et\vecn  ordinary  marnjc  insurance 
>1<        irance.    Ordinary  marint-  insurance  ii\sures  the 
>Uiui  »h?  car^    onlv     'gainst  the  jH-riK  of  the  «  ,    *'ire.  storm, 
ir  ri-k  insures  ajjainst  sinking  li.,  mines,  sul)- 
s.      -I  mcs  against  capture  'ir  against  dcten- 
t     ral  port      It  is  the  universal  practice 
urance  p  licies  to  contain  clauses  ex- 
p  --ssly  cxcImlinK  war  ri-ks.     A  -eparate  policy  must  \k  taken 
lor  such  risks. 


i.-H-k       tf     Xfaritu 
nwni:     .  raiiler 
tii»n  n\  a  !>elli(;erei 
i.ir  ..rdiiiarv  man 


•'-  IMI.llNil,    (!!•     Mil.    (IKIvr    U  \U    I    i'n\    SMll'I'INi: 

'!'1k'  war  li.i-  lia.l  O'ltiiiaralivcly  little  ilTirt  npoii  iii-iiraiK-c 
frnm  tlif  |nTi!-.  if  tlic  -ta.  It  i>  trm-  that  tlicrc  lia>  Ihtii  »  wv 
rise  ill  till'  |>riiiiiinii-  I'liar^'iil,  hut  tlu'  rise  iia^  Ipoiii  slij^ht.  The 
w.ir  ha-  tr.aili-  iia\  !:;alii)ti  iiinri  daii^iTniH  thr()ii),'li  the  chaiii^iiiLC 
I'i  r  lite-  :\]]<\  ihc  -iiii]irf<  ii m  dI  sliurc  lij^Mit>i.  Shi])>  arc  hciii^,' 
ii-id  hiii;  pa-!  tlu-  time  when  thcv  >huiil(|  he  placed  in  the  dry 
d' (.k  t'T  re|)air>  hoiaiise  di'  the  ilemand  fur  >hippiiij;;.  the  hii^ii 
ireii^iit  rate>,  and  the  ii>e  nf  the  duck-  lor  naval  vessel^  nr  new 
shij)i)in.i:.  .\l>i)  mail}  >hip>  are  hein^'  ii>ed  in  traii-oceanie  trade 
whk-h  were  Imilt  prini.irily  lur  eiiastwi>e  nr  even  lake  V(iya,t;es. 
That  the  -ea  is  elaiiniii}.;  nmre  than  its  usual  toll  is  -hnun  li\- 
the  increa-int;  ininiher  of  vessels  posteil  as  inissin«;  at  I.lovd's. 
When  we  s]ieak,  therefore,  in  the  fnllowiiif;  |)ara};raphs,  of  the 
effects  (jf  the  war  on  marine  insurance,  we  refer  to  the  effects 
of  the  war  on  war  risk  insurance,  a  form  of  insurance  of  ])racti- 
eally  no  importance  in  times  ot  peace,  hut  handled  during;  pre- 
vious wars  hy  the  same  agencies  as  the  (jrdinary  marine  insur- 
ance. 


i'RoiiiiiiTiVK  K.\TKs  .\T  Till-;  Hkgin.ni.\>;  ok  tiik  W.\r 

Now  let  us  examine  more  closely  the  d.i,ect  efTect  of  the  war 
njjon  marine  insurance  rates.  The  .VrTi'  y'ork-  Journal  of  Coiit- 
)iii-rci-  for  July  ."Jl,  r.U4,  re])orted  that  war  ri.sk  insurance  had 
reached  almost  panic  rates  in  London  the  day  hefore.  In  the 
week  t"oll()winp;  .August  1.  I'.M 4,  war  risk  insurance  rates  hecame 
almost  prohihitive.  For  voyages  from  Fuigland  to  the  United 
."States  the  rates  advanced  frotu  '>  .shillings  ])cr  hundred  on  July 
-^  to  H»  guineas  per  hundred  (li>..'»  per  cent)  on  August  4, 
;ui(l  I'll  guineas  per  huntlred  on  .\ugust  f.,  an  increase  fi;om  % 
of  1  per  cent  to  iM  per  cent  in  a  little  over  one  week.  .I'l  to  :!0 
))er  cent  was  charged  to  cover  voyages  through  the  North  Sea. 
.'south  American  rates  advanced  to  10  per  cen^  and  rates  to 
India  and  the  l-"ar  liast  were  as  high  as  1."«  to  l'O  per  rent.'  The 
marine  insurance  rates  rose  at  Philadelphia  from  a  normal  of 

'  MarL-ct  U'oilJ  ,iiul  Chr„iiiclc.  Sciiti-nibcr  5,  1914.  p.  302. 


Tin:    KIKKCrS    l)F    rilK    WAR    ON     MARINK    INSrRA\<r.         .'3 

1  per  ci'iit  ti  in  per  cent  and  even  at  tlie  hij,'h  rate  tlie  fjrcat 
majirity  df  companies  refused  tn  transact  l)Usine-«.' 


I'Afsis    piR    Mu;ii    Ratks 
PitJicully  <')'  listiiiujtiiij)  Rish 

Tlie  ]iii!tiar\  cause  fur  sttcli  prohihitive  rates  w.is  tin-  uii- 
eertainiv  (ji  tlu-  ri>k.  The  underwriters  possessed  im  iniornia- 
ti"ii  (ir  c\|K'rieiice  from  which  to  iletermine  the  amnnnt  of  the 
premiums  that  -liould  he  charjj;ed.  They  knew  that  vessels  were 
hein^'  sunk  and  they  knew  that  more  would  l)e  sunk  in  the  future, 
hut  they  had  no  way  oi  determining  what  percentage  of  tiie  voy- 
atjes  hejjun  wouhl  he  safely  completed.  Insurance  could  no 
loiij^cr  he  jjoverned  hy  the  laws  of  prohahility.  The  I)usiness 
hecame  a  f^amhle.  As  Llo\  '"s  had  shut  down  in  London  tem- 
porarily, no  j;ui(lance  was  i  lithcoming  from  that  (piarter  and 
the  leadin};  houses  in  \ew  York  conclude  d  to  refuse  to  take 
any  more  risks.'  This  situation  ended  after  a  few  days  when 
.some  business  was  accepted  at  very  hifjh  rates. 


Tlir  German  Commerce  Raiders 

In  addition  to  the  difficulty  of  determining  rates  the  activities 
of  the  l)elli<i;erent  naval  forces  also  tended  to  hring  about  a  sharp 
advance.  It  will  he  remembered  that  during  the  early  days  of 
the  war.  (lerman  sea  raiders,  such  as  le  Emdett,  the  Karlsruhe, 
and  the  Koeniysberg,  worked  havoc  in  the  commercial  routes. 
Their  successes  were  very  directly  reflected  by  the  insurance 
market.  During  September,  1!»14,  the  number  of  ships  sunk  by 
the  limden  in  the  Bay  of  Bengal  gave  the  war  risk  market  a 
severe  shock.  As  high  as  40  guineas  per  hundred  (about  Al  per 
cent)  was  paid  on  Iwats  to  that  section.  .\t  the  same  time 
two  raiders  were  known  to  be  in  the  South  Atlantic  and  ,")() 
guineas  was  paid  for  at  least  one  boat  from  South  America  to 

'  .W:c  York  Journal  uf  Comnicrci',  .August   1,  1914. 


I 


r>4         iNFi.ri:\(P.  (i|-  Tin:  crkat  war  ipon  siiirpixr, 

New  Y(irk.'  Diirins:  flic  same  ncriod  there  was  a  deciiiiin?^ 
tendency  in  the  rates  on  routes  known  to  l)e  free  of  raiders,  in 
Novenrher  occurred  another  rapid  rise  on  certain  vovajjes  (hie 
to  the  increased  activity  of  the  F.mdcn  and  the  Karlsruhe  in  the 
Imhan  Ocean.  A  week  later  the  insurance  market  became  easier 
with  the  report  that  the  liindi'ii  had  been  put  out  of  action  at  the 
Cocos  Islands  ami  that  the  Kocniijsbcry  was  unai)Ie  to  do  any 
further  ham)  as  she  had  i)een  cut  otT  in  tlie  Kutiji  Delta.  A  de- 
cline in  rates  followed. 

Again  in  January,  lit  IT.  the  (ierman  raiders  were  active  in 
the  South  .Atlantic.  Within  a  few  days  fourteen  vessels  were 
reported  sunk  or  captured.  The  (luoted  rates  to  the  east  coast 
(.f  South  .America,  which  had  been  from  .'l  to  4  per  cent  for  bellig- 
erents on  January  in,  rose  to  <i  to  10  per  cent  on  January  Is.- 
A  week  later,  January  I'O.  there  was  a  drop  to  .">  to  >i  per  cent. 

The  German  Siibiita:ine.- 

The  success  of  the  (ierman  submarine  has  also  been  a  cause 
for  rise  in  rates.  During  the  earlier  days  of  the  war  it  was  a 
new  and  untried  weapon,  but  rejiorts  i,f  torpedoed  vessels  were 
constantly  coming  in.  There  .seemed  to  be  no  method  of  com- 
bating the  menace.  .Again  underwriters  were  unable  to  de- 
termine jusi  what  the  effect  »vould  l)e  on  shipping  and  were 
unable  to  fix  an  ecpiitable  rate.  By  the  last  months  of  I'JKJ, 
the  submarines'  success  as  a  commerce  destroyer  .seemed  to  be 
established  and  much  higher  rates  prevailed  on  voyages  through 
the  submarine  zones  than  to  other  sections.  There  was  also 
a  growing  certainty  in  the  minds  of  underwriters  and  shipping 
men  that  (iermany  was  alx)ut  to  renounce  her  i)!edges  to  the 
United  States  and  resort  to  ruthless  and  indiscriminate  destruc- 
tion of  all  ves.scis,  neutral  and  belligerent.  Rates  again  advanced. 
I'-arly  in  btcember  premiums  from  American  ports  to  Great 
Britain  increased  from  \'/j  per  cent  and  i'  per  cent  to  ;)  per  cent.^ 

'  Fairplay,  September  24,  1914.  p.  509. 
•■  .Veil'   Yi'rl;  Journal  nf  Comnifrcc,  Jaiuiary   18,   1917. 
The  hcoiiomu-  ll'orld.  Uoceml)cr  ^,  1916,  p.  734. 


I 


THE    EFFECTS   OF    THE    WAR    ON    MARINE    INSURANCE         SS 

fn  Fel)ruary  shippers  had  the  greatest  difficulty  in  obtaining  in- 
surance. For  a  time  there  threatened  to  Iw  as  complete  a  block- 
ade of  commerce  as  had  existed  in  the  fall  of  l!tl4.  Under- 
writers refused  to  consider  any  rates  less  than  s  per  cent  fur 
voyages  to  liritish  and  French  Atlantic  ports.  Rates  to  tlie 
Mediterranean  were  from  2  to  Ti  per  cent  higher  still." 

In  May  of  I'.tlT,  with  the  marked  decrease  in  the  refwrted 
submarine  successes,  the  war  risk  insurance  market  l)ecamc  much 
freer.  Underwriters  had  not  become  sufficiently  confident  of  the 
supremacy  of  the  Allied  destroyers  to  quote  new  rates,  but  where 
the  (juotations  showed  a  spread  of  2  to  5  per  cent,  risks  were 
usually  accepted  at  the  minimum  rate  or  at  a  rat  considerably 
below  the  ma.ximum  quoted.  The  British  Admiralty's  policy  of 
secrecy  in  reporting  the  successes  of  the  submarines  probably 
])revented  a  more  substantial  decline  in  insurance  rates  at  the 
time.- 

It  is  impossible  to  secure  complete  quotations  of  rates,  but 
the  rates  oflfered  in  September,  1!I17,  will  serve  to  show  the 
effect  of  the  submarine  n  marine  insurance.  During  the  month 
the  ■  was  a  marked  i.  ■  ng  off  in  the  number  ot  large  British 
v:  St.;  sunk.  For  the  voyage  from  New  York  to  Liverpool  the 
rate  for  passenger  steamers  was  (i  per  cent,  cargo  steamers  S 
j)er  cent,  and  neutrals  10  per  cent;  New  York  to  the  Mediter- 
ranean, special  steamers,  8  per  cent,  neutrals,  ir»  per  cent;  New 
York  to  South  .Africa.  •"!  per  cent.  The  further  decline  of  the 
success  of  the  submarine  in  December  brought  a  drop  in  the 
rate  on  belligerent  cargo  steamers  to  the  United  Kingdom  of 
:}  per  cent. 

The  British  BlocKadc 

But  the  cha'^';  of  the  marine  insurance  business  can  not  be 
attributed  to  '  :  ;  y  alone.  The  British  blockade  was  also  a 
disturbing  fac  rly  in  the  war,  it  Ijecame  apparent  that  Eng- 


'  Thr  I'.cnnnmic  \\  nrld.  Fehruary  17,  1917,  p.  242. 
'Ibid..  .May  V).  1917,  p.  710. 


r.G  INKI.ri-.Nl-F.  OF    rill     (.RKxT   W  \K   VPON   siiirpixc. 

lirul  and  the  Allies  were  determined  i..  make  the  war  econom- 
ical and  financial,  and  that  a  systematic  effort  ^vas  to  1-e  made 
to  cnt  off  complctclv  the  commerce  of  the  Centra!  FVnvers.  Ln- 
(lerwriters  accordiiij;ly  realized  the  danger  of  covering  risks  on 
vessels  to  anv  Init  the  ports  of  the  Allies. 

On  voyages  to  ports  of  the  Central  IVnvcrs  it  was  practically 
impossihie  to  secure  war  risk  insurance.  Insurance  on  cargo 
might  l)c  found,  although  the  rate  was  very  high,  but  only  so 
per  cent  of  the  value  of  the  hull  could  be  protected.  No  in- 
surance was  available  against  capture  by  the  Allied  Towers  or 
against  detention  in  a  belligerent  port,  for  the  Knglish  insurance 
companies  were  ordered  by  the  government  to  stop  insuring 
vessels  against  capture  or  detention  by  the  British  C.overnment 
or  her  allies.'  Despite  the  fact  that  cotton  could  be  sold  in  (ier- 
many  at  a  price  three  times  the  price  on  the  Southern  markets, 
little  was  shipped  because  of  the  absence  of  adequate  insurance. 

The   Uncertainty  Regarding  Contraband 

It  was  also  ;arly  recognized  that  the  lists  of  contraband  or 
conditional  contraband  articles  were  not  dependable.  A  cargo 
at  the  time  of  departure  from  port  might  be  on  the  list  of  per- 
mitted articles,  but  before  it  reached  the  war  zone  it  might 
be  transferred  to  the  list  of  contraband.  Over  night  articles 
were  changed  from  one  list  to  the  other.  There  was  also  the 
danger  that  some  part  of  the  cargo  would  be  found  to  be  the 
propcrtv  of  the  enemy  or  consigned  to  a  citizen  of  an  enemy 
country.  These  two  factors  tended  either  to  make  insurance 
rates  on  vessels  to  neutral  or  Germa-.i  ports  exorbitant  or  to 
make  such  insurance  entirely  unobtainable. 


The  Fluctl-atiox  of  Insurance  Rates 

Not  onlv  did  the  prohibitive  rates  halt  commerce,  but  the  rate 
fluctuations  had  the  same  effect.     At  this  time  it  is  impossible 

'Market  World  and  Chronicle.  October  24.  1914,  p.  523. 


TIIK    KFFFXTS    OK    TIIK    WAR    ON    MARINE    INSURANCE        57 

to  present  a  chart  showing  the  changes  in  war  risk  (iiiotations 
from  week  to  week  l)eginning  with  July,  1!»14.  Such  a  chart 
wonUI  furnish  information  of  considerable  value  to  the  enemy 
in  determining  the  success  of  the  submarine.  Even  if  the  weekly 
t|uotations  coukl  be  obtained  they  would  not  serve  as  an  accurate 
index  to  the  market.  There  has  been  no  standard  rate,  and 
usually  the  rates  offered  on  any  particular  voyage  have  shown 
considerable  spread.  For  example,  a  quotatitJn  of  .I  per  cent 
was  given  by  one  underwriter  on  a  certain  voyage ;  on  the  very 
same  day  and  on  the  same  voyage  another  underwriter  quoted 
a  rate  of  K)  per  cent.  The  rate  also  varies  with  the  commodity 
and  with  the  character  and  the  speed  of  the  vessel.  Even  if 
obtainable,  thercftjre,  a  chart  of  rate  (|uotations  would  not  be 
scientific  and  would  not  show  accurately  the  fluctuations  of 
rates. 

From  the  few  quotations  available,  we  can  state  without  fear 
of  contradiction  that  rates  have  fluctuated  tremendously  dur- 
ing the  last  three  years  and  a  half.  The  following  quotations 
are  for  voyages  from  the  United  States  to  Great  Britain  and  are 
on  belligerent  merchant  ships.  The  rates  for  neutrals  are  usually 
somewhat  higiier. 

Per  Cent 

July  28,  1914  '4  of  1 

July  31,  1914  i 

AuRust  4,  1914  \Oyi, 

August  6.  1914   21 

September  5,  1914  41,2 

January   14,   1915    Vi  of  1 

July  17,  1915  1 

December  2,  1916  3 

January  3,  1917  6 

February  2.  1917  8 

March  17,  1917  8-10 

September  12,  1917  7-12 

October  24,  1917   5-9 

November  14,  1917    4-9 

December  22.  1917 4-9 

January  12,  1V18 4-9 

February  8.  1918   4-  S 

March   IS,   1918    3-4 

April  1,  1918  4 

Anril  20,  1918 3 

May  13,  1918   '.'..".'.'.'.'.'  2K 

May  20,  1918  2>4 


S8 


IM-IAENCK    OF    TIIK    GREAT    WAR    IPON    SlIII'PlNr. 


INADKQIACY  OK  CaIMTAI,  OK   PRIVATE  COMPANIES 

So  far  niiTcnce  has  Iwcii  niatle  only  to  the  ordinary  marine 
insurance  facilities  in  existence  in  times  of  peace,  the  imder- 
\vritir>  and  the  larRe  companies.  However,  we  must  not  place 
upcn  them  the  l)lame  for  the  chaotic  condition  existing  in  ma- 
rine insurance  at  the  U-KinniiiK  of  the  war.  the  prohibitive  and 
tluctiiatinK  rates  and  the  resultinR  haltinR  of  commerce.  The 
underwriters  and  the  companies  were  endeavoring  in  every  way 
to  meet  the  emerRency  for  which  they  were  entirely  unprepared. 
rhe_\  could  not  l)e  prepared  for  it. 

^iarine  insurance  is  nrdinarily  a  business  that  can  be  con- 
ducted on  n  small  capital.  With  the  outbreak  of  the  war,  the 
insurance  market  was  called  upon  to  cover  not  only  the  risks 
arising  from  the  perils  of  the  sea.  but  also  a  second  line  many 
times  as  great— the  risks  arising  from  war.  The  underwriters 
did  n.it  possess  the  necessary  capital.  Increa>ed  premiums  might 
fullv  ecpial  the  losses  occurring  over  the  period  of  a  year,  but 
there  were  more  frequent  calls  for  the  payment  of  losses  than 
befiire  the  w.i- 

.Again.  >n  as  commerce  was  partially  revived,  shipping 

prices  adva..     '.  greatly.    The  value  of  vessels  advanced  from  50 
to  100  per  cent  and  in  some  cases  even  more;  freights  advanced 
.■)00  per  cent ;  and  cargoes  about  50  per  cent  in  value.    .\n  uiider- 
writcr  instead  of  being  called  upon  to  cover  the  ordinary  marine 
risk   on   a   vessel   valued   at   $400,000,   on   freights   valued   at 
S:.'o.(too,  and  cargo  valued  at   $1,000,000,  must   furnish  both 
marine  insurance  and  war  risk  insurance  on  a  $()00,000  to  $S00,- 
000   vessel.   !|(1:.'0,000    freights,   and   a   s?!,. ".00. 000   cargo — two 
risks  of   $i'.420,00O   instead   of   $1.4-'0,000,  one   risk   of   prc- 
^var   days— an   increase  of  $1,000,000   or  about    70   per   cent. 
It  i~  natural  that  the  underwriters  were  unable  to  handle  the 
situation  and  that  chaos  resulted.     Nor  is  it  astonishing  that  tlic 
underwriters  and  companies  advanced  their  rates  so  sharply  that 
thev  were  soon  prohibitive. 


TIIK    EFKKCrS   OF    TIIK    W  AK    ON    MARINF.    INSrHANTF 


-.0 


TUF,    F'ORMATION    {IF   tloVERNMENT   WaR    RiSK    BlRKACS 

Very  early  in  the  war,  however,  another  important  tactnr 
entered  the  insurance  field.  When  the  lack  of  insurance  facili- 
ties threatened  to  halt  all  commerce  lor  the  duration  oi'  the  >var 
and  when  it  was  perceived  that  private  capital  could  not  meet 
the  increaseil  demands  made  upon  it.  the  various  governments 
were  cpiick  to  act.  They  went  into  the  insurance  business.  With- 
in a  very  few  weeks  after  war  was  declared,  eleven  national  war 
risk  bureaus  were  in  operation  in  the  follow  ing  countries :  Bel- 
gium, Denmark,  l-rance,  tiermany,  Greece,  Cireat  Britain.  Italy, 
Japan,  Norway.  S^veden   and  the  United  States. 

.\lthough  all  the  bureaus  were  established  to  accomplish  the 
same  purpose,  the  protection  of  the  nation's  commerce,  they 
differ  in  their  methods  of  operation.  .Ml  of  them,  however, 
follow  closely  one  of  the  four  general  plans  adopted  by  the 
United  Stat»s,  Great  Britain,  Japan  and  Norway,  respec- 
tively.' 


The  United  States  IV ar  Risk  Bureau 

In  the  United  States,  by  an  act  of  Congress,  approved  Septem- 
ber 2.  11)14.  the  Bureau  of  War  Risk  Insurance  was  established 
as  a  bureau  of  the  Treasury  Department.'  Mr.  William  C.  De 
Lanoy.  an  experienced  insurance  underwriter,  was  appointed 
Director  of  the  bureau  at  an  annual  salary  of  $5,000.  An  ad- 
visory board  of  three  members  skilled  in  the  practices  of  war 
risk  insurance  was  also  appointed  for  the  purpose  of  assisting 
the  bureau  in  fixing  rates  of  premium  and  in  the  adjustment  of 
claims  for  losses. 

The  original  act  empowered  the  bureau  under  the  direction 
of  the  Secretary  of  the  Treasury  to  make  provisions  for  the  in- 
surance by  the  United  States  of  American  vessels,  their  freight 
and  passage  moneys,  and  their  cargoes  against  loss  or  damage 
by  risk  of  war.  whenever  it  should  appear  to  the  Secretary 

'  Marki-t  World  and  Chronicle,  October  24,  1914,  p.  523. 
'  Public  No.  193.  63d  Cong. 


00 


INFUKNCl.    Ill     Till.    (IKI.Al     S\  AK    ll'nN     SlIII'l'lNT. 


that  American  ves»el>,  >hi|)j»ers,  vr  iniin  rti'r>  in  AnK-rican  \T«i- 
sel«  were  unalile  in  an\  iradc  to  secure  a<le<iuate  war  ri>k  insur- 
ance "11  reaxiiial.lc  term-.  .V"  rt.xeil  rate-  were  e'^talilislied.  Init 
it  was  pr.i\itle<l  that  the  bureau  >hnultl  iletermiiie  llie  rate  t'T 
each  vixa^e  aiinr<lin>;  to  the  character  oi  tlie  vessel,  the  mute 
taken,  and  tlie  car^o  carried.  Di-pute^  over  the  adju>tnu-nt  of 
claim-  were  to  l)e  -ettled  in  the  district  court  ot  the  L'nited 
State-  in  the  (H>trict  in  which  the  claimant  or  his  a^ent  resided. 

An  ajipropriation  ol  $:..tMMl.t»iUl  was  made  from  the  Treasury 
of  the  United  States  for  the  purpose  of  paying  all  losses  and  an 
aiMitiniial  $liMi,(i(i(i  for  salaries  and  expenses  of  the  Imreau. 
The  act  specihed  that  the  bureau  mi>;ht  Ije  suspended  liy  the 
i're-  lent  whenever  the  need  lor  such  insurance  ceased  to  exist 
an  nio.-t  was  not  to  continue  more  than  two  years.'  Later 
ame.idments  to  the  act  of  September  i',  11M4.  have  extended  the 
time  if  operation  of  the  act  to  not  later  than  June.  I'.'-'l.' 

There  were  two  outstanding,'  features  of  the  Unhcd  States 
War  Risk  Insurance  Bureau  established  by  the  act  of  Septeml^er 
'_',  1".»14.  and  operating  while  the  United  States  remained  neutral. 
(1)  Insurance  was  issued  only  on  vessels  flying  the  .American 
tiag,  or  only  on  cargo  carried  in  .\merican  vessels.  (2)  The 
premium  rate  might  be  fixed  for  each  voyage  by  the  bureau, 
although  in  practice  it  remained  almost  unchanged  for  certain 
of  the  safer  trade  routes. 

Before  the  United  States  entered  the  war,  the  bureau  refused 
to  cover  risks  on  anv  cargo  that  might  be  considered  contraband 
bv  the  belligerents.  Following  (ierniany's  declaration  of  unre- 
stricted submarine  warfare  in  February,  l'.>17.  and  the  breaking 
of  (lii)li>matic  relations  between  the  United  States  and  Germany, 
the  bureau  revised  its  regulations.  On  March  :;i,  rates  were  in- 
creased but  at  the  same  time  risks  on  cargoes  that  were  classed 
as  contraband  were  accepted,  thus  recognizing  the  practical  state 
of  war  with  (iermany. 

Following  the  entrance  of  the  United  States  into  the  war, 


I'uhiic  No.  103,  f>3<l  ("diiK. 
'  Tuhlic  No.  20,  6Sth  Cc  ng. 


TIIK    KKKKCTS    OK    TIIK    WAK    DN'    MARINE    INSIRANCE 


til 


an  anicniltmiit  tu  the  act  alnne  outlined  \va»  passed  on  June  \-2, 
l!tl7,  extendinjf  radically  the  moim;  of  the  Bureau  uf  War  Uisk 
Insurance.  The  Imreau  was  authorized  to  make  provision  for  the 
reinsurance  by  the  United  States  of  ve>«sels  of  foreign  friendly 
lla>,'s  or  their  car!,'oe>.  or  Iioth,  when  such  vessels  or  their  cargoes 
wi-rc  insured  by  the  government  of  a  country  at  war  with  an 
encniv  of  the  United  States,  and  also  to  reinsure  with  such  gov- 
cruments  American  vessels  and  their  cargoes.  Additional  ap- 
|)ropriations  were  granted  to  the  bureau  by  this  amendment. 
)i(,-,(i,0(Mi.o()(i  for  the  payment  of  losses  and  $2r)(),0()0  for  the  ex- 
l)c'nses  of  the  bureau.' 

Under  the  amendment  of  June  12.  IIHT.  the  bureau  entered 
another  insurance  field.  Realizing  the  heavy  risk  of  death  in- 
curred by  officers  and  crews  of  the  merchant  vessels  entering  the 
submarine  zone.  Congress  authorized  the  bureau  to  establish 
a  Seaman's  Division  and  the  owners  of  American  vessels  were 
lequired  to  take  out  war  risk  insurance  for  the  officers  and  crews. 
Within  three  weeks  .''.,44<!  individuals  had  been  insured.  Under 
this  scheme  provision  is  also  made  fur  the  payment  of  an  in- 
demnity for  loss  of  limb  or  any  other  peimanent  disability.  \ 
second  advisory  board  of  two  memlwf-'  skilled  in  the  practices 
of  accident  insurance  was  appointed  for  the  purpose  of  assisting 
the  bureau  ui  adjusting  claims  in  connection  with  the  seamen's 
insurance.' 

.\t  the  present  time  the  Bureau  of  War  Risk  Insurance  is  ad- 
ministering not  only  the  marine  insurance  on  vessels  and  car- 
goes, but  also  the  accident  and  life  insurance  on  the  officers  and 
crews  of  merchant  ships  and  on  the  soldiers  and  sailors  in  the 
service  of  the  United  States. 

On  August  V.K  r.tlT.  the  bureau  issued  certain  specifications 
regarding  the  vessels  upon  which  insurance  would  be  placed. 
Ships  were  recjuired  to  be  armed,  paintetl  to  reduce  visibility, 
provided  with  smokeless  fuel,  and  equipped  with  appliances  for 
producing  smoke  clouds  to  escape  torpedo  attack. 


Public  No.  20,  65th  Cong. 


».J 


INKt.lEMF.    OK    niK    llBEXT    W  \M    IIHIN    SIIII'PINO 


The  Pri>uli  II 'nr  /?/.«<■  /?Mr.\iM 

Tin-  war  .li.l  n-'t  fm\  Creat  nrifaiii  ciitirt-ly  nnpn-parod,  at 
lca*t  a*  far  a>i  war  ri«k  m-.iraiu-f  wa^  cnncfrtUMl.  In  I'."*"*  the 
cntnmilttT  nil  a  tiatiniial  j;uar.iiit«-  tnr  the  v\ar  ri^k^  ..I  shipiHiiK 
wa^  ai.iH.itm-<l  l.y  t»u-  Uriti.h  Parliament.  A  U-i.Ktliy  iiivcHtiRa- 
tion  was  cnr.dticte.l  l.s  the  Cduiniitti-i-  aii.l  tlicir  ri|».rt  an«l  ri-c- 
..nimendations  were  i»ul.lislie<l  l.iit  ii..  legislative  actiui,  lalloNve.l  ' 
hi  Inly.  l'.'i:l.  another  conunittec  wa»  ai)ii.iiiitcil.  which  in  May. 
litH,  siiliiiiitted  to  I'arlianieiit  a  KoverimutU  war  risk  insurance 
scheiiie  which  was  accei-ted  l.y  Parliament  on  the  Moiulay  la-tore 
war  was  ileclareil." 

Although  there  was  no  time  to  w«irk  out  some  of  the  .letaiU. 
the  British  scheme  of  war  risk  insurance  wa«  pnt  int..  'feration 
•  hirinn  the  first  week  ni  August.  llMt.  dealing  separatelv  with 
hulls  and  carg.Kfs  The  insurance  on  the  hulls  was  worked  in 
conjuncti..n  with  mutual  dubs  which  existed  when  war  was  de- 
clared. All  vessels  were  recpiired  to  he  insured  in  one  of  these 
clubs  or  associati(.ns.  The  clul.s.  in  turn,  reinsured  with  the 
Rovernmeiit  M>  per  cent  of  their  war  risk  on  vessels,  the  gov- 
ernment receinuK  the  same  proportion  of  the  premiums.  The 
scheme  applied  only  to  British  vessels  and  required  ..wners  and 
their  captains  to  conform  to  all  instructions  issued  hy  the  .\d- 

miraltv. 

Only  cargoes  carried  in  vessels  insured  by  the  clubs  or  other 
associations  apprnve-l  by  the  government  were  insured  by  the 
^nvernment  ofticc.  A  mininuiiu  and  a  maximum  premium  rate 
was  recommended  by  the  committee  responsible  for  the  scheme, 
but  as  there  was  not  sufficient  tmie  to  fix  such  premiums  .mi  die 
basis  of  possible  ri-ks.  a  flat  rate  uas  established.  In  this  respect 
the  British  scheme  .liffers  fr..m  the  scheme  adopted  in  the  United 
States,  the  latter  in  theorv  determining  the  rate  for  each  voyage 
and  the  former  ti>;in>;   i  .Itfmitc  flat  rate  for  all  voyages. 

'  Ucport  of  Cmmittcc  or    :.   Nat    nal   (luarantce    tor  :!ii-   War  Ri^ks  of 
Shipping.  Wvmaii  am!  Sons.  Limited.  Li  i.don,  1908. 
=  hiirphy'.  January  J.  191,"    \>-  102. 


THE    K^KHTS   iiF    rillC    WAII    iiN     M^UINi     IN-IIIAMCF. 


<(.-( 


The  aimx  of  the  ^''^prntnem  War  Kisk  iitircati  wcrr  two; 
l"ir«f,  the  inatiitfiiaiKir  >'l  ihc  Uritith  iviT*^-  tradi-,  thr  i  \- 
iliannf  ni  mamiiacitirt'M  ami  loal  for  the  natinns  <tu|i|)lir^  i»l 
IimmI  ami  raw  matcriaU  Sccitiul,  the  cotKrtitratinti  ui  the  Uoval 
N'av)  on  it«  pririiaty  iltit\  of  ilefentini;  the  naval  .trennth  of  the 
tiH-niv,  \)\  rplicvuij{  it  from  the  ilcniamK  of  tlif  imiiviihial  trader 
ami  >.hi|M»\\ner  for  prottction  ai;aiii-t  imlivi»luai  lo--* 

(>ii  AtiRM'^t  l'.».  II'IT,  a  new  plan  '>r  the  insurance  of  hulN 
went  into  etTvci  m  (ireat  Hritain  in  main  laHi--.  umler  the 
fir-*l  -.chenir.  the  premmtns  received  i>\  the  clul)->  had  not  Iwen 
««thcicnt  to  meet  the  lo>se>*  ami  the  Kilancc  had  to  Ik-  made  jjimmI 
liv  callr*  oM  the  niemlH'r»  I'nder  the  new  plan,  the  entire  lialiility 
i-v  at  the  ri>k  ..f  the  (government,  and  mure  detniite  |)rovi^t>'ti» 
.ire  also  made  to  determine  the  value  of  vetMjts  io«t.  Ki>k'»  were 
divuled  into  three  cia>»es.  fully  re<|ui*iiioncd  steamer-,  ve*Mfl» 
un<ler  liner  re(|uiHition.  and  frei>;ht  «.hi|;>  The  fjovernmctit  .is- 
Numes  res|M)n>iliiIity  for  all  war  ri>ks  on  vessels  of  the  first  class, 
whether  total  or  |>artial.  ami  in  rase  of  total  loss  (wiyment  is  to 
U-  maile  on  the  "  ascertained  vaUu  "  The  povernment  also  pays 
claims  for  jKirticular  averaRe,  .salvage  charj^t^,  and  t;*^"*'"''' 
averaj;e  in  case  the  vessel  is  damaged  and  not  totally  lost.' 

Ihe  >ame  risks  are  covcreil  on  vessels  of  the  second  class, 
hut  m  case  oi  total  loss  the  owner  is  to  ha   f  the  option  of  rc- 

■' The  lo5i  rrsuItinR  from  any  of  the  perils  above  menlioned  (perili  of 
the  «ea.  war  ri»kii,  etc.)  may  t)e  a  partial  lo«"i  and  may  he  st-'tlft  either  in 
accordance  with  '  Kcneral  avcraKc '  or  particular  avr^aRe'  ry'  '  The  mari- 
time laws  of  iiatioiij  orditiHrily  provide  that  any  lois  i-<iultinK  irom  a  volun 
tary  or  deliherate  lacrifice  of  vesnel.  carijo,  or  other  I'l'iierty  for  the  commim 
«affl>  and  welfare  5hould  not  lie  Imrnr  entirely  by  ^u-  i>articular  owner*  of 
lltr  >aiririced  pr<>|)ertie».  but  shouhl  be  fairly  pror  ,  ,|  among  all  inlere»t» 
that  are  henetited  by  such  sacrifice.    This  rule  is  kn.i«n  as  Kenerat  averaKe. 

.\  partial  loss  may  also  t)e  settled  m  accordance  with  the  '  particular 
average  '  rule,  i,  r..  when  the  proiierty  insured  is  damatied  by  accident  or 
is  not  destroyed  by  the  master  of  the  vessel  for  the  purjwise  of  savinu  other 
proi>erty.  the  loss  must  t>e  Iwrne  entirely  by  the  owner-  of  ihe  damaged 
pr<i|K-rty  or  by  iis  insurers. 

.\  partial  loss  or  liability  may  result  from  the  payment  of  salvaxc,  which 
i^  the  reward  Kranted  by  law  to  those  who  save  life  and  proiierty  at  sea. 
If  a  vessel  in  distress  receives  assistance  from  another  vessel  and  is  towed 
to  iHirt.  the  vessel  giving  assistance  may  claim  salvage,  and  the  amount  legally 
due  i>  iiayablc  by  Ihe  owner  or  by  the  insurer  of  the  vessel  and  cargo  to 
which  assistance  is  given."  Johnson  and  Huebner:  Principles  of  Ocean 
TiansforlatioH,  p.  248. 


«4 


i>H,i  KNi  ^   <M'    rill 


,HI  Vr    W  vM    I  I'ON    '^  111  CI"  Nil 


r,.\crii;  :  ilu-  l«i-'  "n  llw  "  I'.icriaiiu-'l  vahw  "  -r  >n  the  aiT'  t.  i 
iH'.uriU  ufiiler  ln'  im>Iicu'  wliuh  i^  taM-.l  un  ihf  n.>vfrmw«l 
\aliic.  ..  •  al  iirr^rnt  talcn  i.'l.  p'li'  an  rxcr^.*  \atiu-  t..  I*  lixcil 
li\  il«- i..iminl("   ,1  i>l  ;i|i|)r..vril  ii\  lUc  coiitr-.IU'r 

l'rcii,'lil  >lii(t»  .It  (■'  I*  iiiM'ml  3K.'ii»M  the  ri»k«  m  vvar  uh«!it 
IM.Iiiu  l..r  vn\.»m>  at  rati«  l..  Ik-  tixnl  fr.nn  imu-  t..  tintr  In 
all  ihn-f  iaH»  i..m(Kii»atinii*  ami  all.  \\am«.'!«  t'>  .l.-pctiihiit-.  ■•i 
.  fVmrs  atitt  crt  >v  tip  t«i  «.»r  KnviTnmmt  ^ali-  will  l«'  |>iii<l  ' 

\\  lull  tlu-  ^iiliiuriitc  |>"lii'>  '<i  <.«Tmativ  thrcalviiol  !••  ciil  <iiT 
I  iiniaii'l  fr.iii  lur  v.iircv-  .-»'  MipjilicN  tin-  jjovi-rnmcnt  war  ri-k 
iii-iirami-  ua*  iMfii.l.'.l  t<<  all  lu-utraN  tritlim;  with  the  L'nitcil 
Kiiit'>l..ni.  I  lu-  rail-  was  the  >aiue  ;t=  tlu-  rate  nffcrt-.l  In  liriti^h 
slinn.inj;  and  wan  •sewT'Al  jH-r  cent  licli>w  ttn-  rate  enfnrcn!  <>n  the 
nlK-n  iiiirkit.  It  was  reali^'il  tliat  tiie  -  vfrmnftit  w.nilil  jirol.. 
:ilil\  >ui!iT  lit-avN  Ins^fs  1ki  .uisc  .)I  »iich  li'u  r.ilc-,  liut  rl  It  tlic 
incrca-f«l  inifHrtH  irMtn  iifitiraU  thus  jjaiticil  would  mop'  than 
otif-'it  anv  jxts-ihle  !.,«». 

Ihf  silifim'  of  war  risk  insurance  in  o|ier.ition  ii;  i  reat  Britain 
has  not  proved  entirely  satisiactory.  The  flat  rati-  tixcd  hy  the 
liurean  h.i'  Inen  i,»<  low  lor  the  dangerous  trades  and  i.  ■  hijjh 
lor  the  satir  tradtv  As  a  result  the  safer  risks  have  liecn  in- 
Hured  in  the  open  market  and  the  dangerous  risks  have  lieen  left 
to  the  K')Vfr"ni«^"t-  l^'*^  delkit  of  the  Imrcau  has  had  to  Ik; 
made  up  In  taxing  the  people 

In  Octoher.  I!»IT.  several  changes  were  l)eintj  lonsiilercd  to 
remedv  this  feature.  It  was  projjosed  to  do  away  with  the  llat 
rate  and  to  fix  rates  each  day  through  a  special  liody  of  experi- 
enced underwriters  The  government  was  to  insure  all  carp)es, 
nonrequisitioned  a-  well  a-,  reijuisitioned.  thus  chisinj;  the  ine 
war  risk  market.  Such  a  -chcme  was  ojiposed  l>y  the  Ilnjjlish 
underwriters  liccause  of  the  insurance  monojwiy  \i\\en  to  the 
i.;Mvernniint. 

Uecenth  the  llat  rate  was  ahandoncd  and  premiums  are  now- 
ticinir  determined  accorilinj,'  t.>  the  risk  of  the  voyage.   There  ai>- 
peared  in  the  Ai'ii'  Vorh  Journal  of  Commerce  lur  May  24,  I'.US, 
'  I  he  Mannrr,  Scpttmbcr  15,  I'Jl".  |.  -Vfl. 


THK  RrrtcT»  or  .ii»;  wah  omj   M.\m>f   iNtiMNCK 


ns 


a  «tiiirfiMWt  i»»uc«l  l>y  Ih '  Hril»»h  War  U\*k  ln»uratice  <Jflftcc  re- 
.lucitiK  rhc  rair  ••«»  vnyag*'*  liriwwi  the  Utiitol  Kmjr<l'»ni  awl 
thr  «-a*t  (•■«»»«  of  \..rth  <>r  t  ntlral  Armrica  fr.itH  ♦.*>  ^hillmi;* 
|wr  Immlrcil  l.i  I".  •.hilliiiKs  an«l  on  v..ya(;r%  U-iwttrn  thv  L  iiitcl 
KinRflotn  awl  tlu  «:i*t  cna«t  uf  South  America  from  T'>  '•hillinR* 
|>rr  htmtlrol  i  >  •"•  -hit'.inK-i.  I  he  oaiiie  nnii'  nncement  ettahlmhcil 
a  r.m  .1  7  |>«r  mit  •  n  vyagc^  tron   ti      '  ntteil  Kin|{<k>m  Jirect 

to  (ifCCCC. 

77i,-  Jiif>int(-sf  War  Risk  Plan 

The  plan  ailopteil  in  Japan.  Septcnil*r  \i.  lUH.  «liflfen<|  ra.li- 
cally  irom  citli«  r  of  the  ih.  ve  plan.  No  jiovermncnt  war 
risk  luireau  wa*  ctali!:  'ic<!.  liut  in^uraiKe  x<.i.  handled  eiuirelv 
thr-'iiRh  the  usual  prcvar  ihanniK.  the  underwriter*  :hu|  the 
insuranve  comfKiniL  Since  ni'>»t  of  the  Japane**'  onmHrcc  wa-* 
far  rcinoved  from  ibr  region  of  the  *ul)inariii«-  ^r  ilie  (.iertnaii 
raider,  the  necil  lor  a  novirninent  war  ri>k  Imrcau  \va>  i  it  tell 
L'p  t..  the  end  of  iiu:.  only  two  >ira" -rs  i.uwJ  in  lap^n  had 
l)ecn  l">t  hy  a  v*    »•  risk. 

Follow ing;  is  an    \truct  from  the  l.'th  Fin^i' 
Jounidl  of  Japan     HM:.)  isMicd  '  v  the  Japs 
descriptive  of  the  Japanese  sichvnu'  of  war  risk      •      li 

The  \\  ir  .Xlirine  In-turarice  indt-miiity  *       iinnul- 

t;at<d  on  Scpfnilter  1  !'.»'  and  the  Oruu.a.u  ■  111  of 
the  Department  of  ,\t;ricultiirf  and  I  oninicrcc  on  the  fol- 
lowing day,  and  imth  wire  iinmcdiately  put  in  force. 
.\ccorditiK  to  the  act  above  referred  lo,  if  any  Japanese 
in>urancc  company.  <ir  am  fortign  in-;.r.  ncc  company 
having  hrancho  in  Japan,  makes  ;i  war  insurance  •  iitra', ; 
at  a  premium  not  higher  than  the  rate  tixcil  lt,»  't  coni- 
(letent  authorities  and  makes  good  therefore  .iiiy  loss  or 
damage  caused  ]>  the  war.  the  government  is  to  grant 
as  an  imlemiiity  i  ■  ■^uch  insurance  company  a  jKirtitm  oi 
the  sum  thus  ni  ule  go»Kl.  It  is  provided  for  m  (.)r«iinat"  • 
No.  lu  of  the  lH])artment  of  .Agriculture  and  Commc;- 
that  the  amount  to  \x  s<>  granted  hy  way  of  indemnities 
shall  lie  NO  ja-r  cent  of  thv  ^um  thus  made  good.' 

■  Tlw  Economic  II  orld.  1-ebruary  19,  1916.  p.  258. 


/  t'  iHOIliir 
'IHlle.'t 


tit! 


IVKI.hNll     I'l       III!     (,HI\r     W   \K     r|Ml\     •.llll'I'INti 


In  ufliiT  «•  ril».  |;i|>;iiH-«f  m-iiraiKT  cunipanit-*.  nr  l>iri'i),'n 
itiMiraiK-c  r. ■nipaiiK-'  willi  liraiiili  ><(Ucv^  in  lajian.  in^iirin;;  vi->- 
•»K  It  r.ili>  not  hi;;lur  than  ilu-  inaxiinuni  tisf<l  In  tin-  j;iivcni- 
I'unt  art'  Mi<Uti;iiit'K«l  !>>  llif  (^■i\friinu'nl  !<•  llu-  vxtiMit  "I  ^i"  per 
iTiit  nt  all  tluir  1m«.i-»  anil  art-  |iiTmitlcil  tn  retain  all  •>(  their 
|innniiMi^  Ihe  I'nipaine-  larrv  Imt  •_'••  jx-r  cent  of  the  risk. 
Ini  art  |ianl  l"»i  per  leiit  cii  the  |>renmiiii.  Ihe  proinisal  cmcrs 
l'>ili  japaiKNe  lirIK  ami  ear>;>ie'>  and  al>n  earpiex  exported  t>> 
1  r  iri-'i  Japan  li\  ^teaiiier^  nf  any  nation  except  an  enein\.  Iie- 
t\.ee  '  ■  iint>  ^pecitied  lp\  the  ^overnineiit.  In  January.  l'.'l."i. 
a  nevv  ..  rannenieiit  wa-  inaile  allowin;;  the  ri>k  on  ve>>els  leav- 
ing I  iifjl.iinl  I'or  Japan  to  Ik'  covered  in  London  without  cahlinjj 
to  Japan,  the  IhII  "i  lading;  kinj;  endorsed  to  tlie  effect  that  the 
car^o  had  lieen  ni>nred  ananiNt  war  risk.' 

ilu-  ori^nial  schetne  continued  in  force  until  the  lo>ses  paid 
out  lor  the  few  J.ipane«e  ve«>els  ^unk  proved  to  lie  too  heavy  a 
hurden  on  the  treasury.  In  .septeniher,  I'.UT,  a  new  scheme 
ciine  into  oinrration  uiuler  wliich  the  fjovernment  t'lxed  the 
prcinituii.  received  it.  and  paid  the  loss,  a  jjovernnieiit  liureau 
taking  the  place  of  the  ;;overnmcnt  aideil  insurance  underwriters 
and  companies." 

Till'  Xorii'i'fjian  11  nr  Risk-  Plan 

In  .\'orwa\  a  company  was  formed  to  take  2i>  per  cent  of  the 
war  ri»k  insurance  on  all  j.;(mi<Is  ship|K'd  to  or  from  .Norway. 
Ihe  rcniainiiif;  ""H  per  cent  of  the  war  risk  is  assume<l  hy  the 
-tate  and  the  assured.  War  risk  on  hulN  of  steamers  is  coiii- 
puisnrv  ill  ;i  mutual  association  which  has  lieen  estahlished  in 
C'hristiania.  The  owner  is  allowed  to  take  :.'i»  per  cent  of'the 
insurance  himself.  .'\  maximum  and  a  minimum  premium  has 
been  fixed.' 


'  l.iirf'lciw  January  -M.  l'>15,  p.  88. 

■  Ihid..    lar.iuirv  ,!,   l'M8. 

'  Ibid.,  October  8.  \'A4.  p.  581. 


THE    EFFECTS   OF    THE    WAR    ON    MARINE    INSURANCE         07 

The  Rates  of  the  Government  War  Risk  Bureaus 

In  general  the  rates  of  the  government  war  risk  bureaus  have 
l)een  considerably  under  the  rates  charged  by  private  companies. 
The  market  rate  nn  voyages  between  the  United  Kingdom  and 
the  United  States  on  August  (5.  1914,  was  20  guineas  per  hun- 
dred, and  the  British  Government  war  risk  rate  on  the  following 
day  was  4  guineas  for  the  same  voyage.  In  August,  1!»17.  the 
United  States  War  Risk  Bureau  increasetl  its  rates  between 
United  States  ports  and  European  and  Mediterranean  ports 
from  5  per  cent  to  GMs  per  cent.  At  the  same  time  the  open 
market  rate  quoted  in  New  York  was  7VL>  per  cent  to  10  per  cent 
to  British  ports,  12  per  cent  to  Havre,  and  10  to  15  per  cent 
to  Mediterranean  ports. 

In  February,  11)17,  the  rate  charged  by  the  British  (Govern- 
ment was  :{  per  cent  as  compared  with  the  flat  rate  of  10  per  cent 
enforced  on  the  local  market.  During  the  same  month,  the 
United  States  Bureau  quoted  a  rate  of  J  per  cent  althougl.  the 
prevailing  market  rate  was  U  to  10  per  cent. 

Effect  of  Government  Bureaus  on  Private  Companies 

The  natural  conclusion  to  draw  from  such  low  rates  would 
be  that  all  the  business  had  gone  to  the  government  bureaus  and 
that  private  companies  had  been  forced  to  discontinue,  but  such 
has  not  been  the  case.  Most  of  the  government  bureaus  are  so 
hedged  in  l.y  restiictions  and  conditions  that  many  vessels  find 
it  iinpossihle  to  secue  insurance  from  them.  In  the  first  place, 
with  few  exceptions,  the  bureaus  are  permitted  to  write  insur- 
ance only  upon  vessels  flying  the  flag  of  the  respective  countries 
that  established  them.  .As  a  neutral  the  TInited  States  bureau 
declined  to  underwrite  the  war  risk  on  all  commodities  that  had 
beeii  held  to  be  contraband  by  any  of  the  belligerent  Powers, 
or  which  were  in  cargoes  any  part  of  which  consisted  of  such 
contraband.  For  that  reason,  insurance  on  cotton  could  not 
be  obtained  from  the  government  War   Risk   Bureau  even  in 


f.S  IMLl-KNCE    OF    Till:    llKKAl    WAK    II'ON    SllirPISO 

American  lidttnms.  The  restrictums,  as  has  been  pointcil  out 
alxnc.  wen-  nin.hficil  when  the  United  States  liecanie  a  helliKer- 
cnt.  Init  vessel  owners  must  still  t.ill.nv  closely  rcKulati.uis  rc- 
fjardinR  eciuipment  ami  coal  Ijeture  insurance  will  l)e  granted  hy 

the  bureau. 

The  text  of  tiie  law  creating  the  War  Risk  Insurance  ilureau 
also  specifically  provides  that  war  risk  insurance  shall  lie  issued 
"whenever  it  shall  appear  to  the  S'cretary  that  American  ves- 
sels, shippers  ur  importers  in  American  vessels,  or  the  masters, 
ntticers,  or  crews  of  such  vessels  are  unable  in  anv  trade  to  se- 
cure adecpiate  war  risk  insurance  on  reasonable  *"  •    •." 

As  we  have  shown  in  an  earlier  paragraph,  i  .t  rate  of 

the  I'.ritish  War  Risk  Hureau  proved  to  be  too  low  i..."  dangerous 
voyages  and  too  high  for  the  safer  trades,  resulting  in  nmst  of 
the  insurance  on  safer  trades  l>eing  carried  on  the  open  market. 

In  both  the  United  States  and  Creat  Rritain  the  value  of  the 
busines>  done  l)y  the  government  Inireaus  has  been  a  very  small 
part  of  the  marine  insurance  business  transacted.      The  report 
for  the  U.iited  Slates  War  Risk  Bureau  issued  in  August.  l'.»17, 
shows  thai  from  the  founding  of  the  bu'-eai:,  jc,,tember  :',  11»14, 
to  June  :i<i,  1!>1T.  insurance  to  the  amount  of  $0L':i.'.M;4,.".i>»  was 
written   and  that  premiums   were  received  to  the  amount   of 
$l.%,-20s,T:iO.:5T.'     For  the  year  lUlt!  alone,  the  thirty-two  ma- 
rine insurance  companie'^  reporting  to  the  State  of  New  ^'ork 
covered  marine  risks  totaling  $1,214,110.4:5:.  and   received   in 
premiums  *l-.M:5T..V'.f>.     The  latest  report  of  the  bureau.  Janu- 
ary fi.  I'.ns.  showed  that  only  $l,<K.l,.-.:J7..-.2:.  in  insurance  ha<l 
been  issued  up  to  January  1,  l'.»l^- 

Despi.e  Mie  small  amount  of  insurance  carried  by  the  govern- 
mci  t  bureaus,  thev  have  given  very  valuable  aid  t-.  shipping. 
They  have  l)een  ;'  ressful.  not  because  they  have  monopolized 
the  marine  insurance  market  and  covered  enormous  risk-,  but 
because  thev  have  served  as  a  steadying  influence  for  the  private 
companies  and  have  prevented  the  charging  of  unreasonable 
and  prohibitive  rates.  They  came  to  the  rescue  of  commerce 
•r/if  r.conomir  ll'orld.  .August  4.  I'Jl?.  p.  170. 


Till      i;iFi;»TS    (>|-    Tin:    war    n\     MARINE    INSURANCE 


Cf> 


at  a  time  when  tlu-  'Tdiiiary  iiiMirancc  facilities  were  in  a  condi- 
tion of  diaos. 

In  all  aildrt--  in  the  suninu-r  nf  lid.'..  Si.  Ilduard  Hain. 
(hainnan  of  the  London  deneral  Shi|X)\vners  Socictv.  declared 
that  the  introduction  of  the  ).;oveninienr  scheme  fur  war  risk 
insurance  at  the  luithreak  of  tlic  war  had  done  nnidi  to  jirevent 
panic  rate-  ft.r  insurance  and  had  given  confidence  to  shipowners 
to  continue  their  oversea  tradinj;.' 

Tiieir  steadying  intluence  may  he  seen  in  the  hiylier  rates 
charged  on  neutral  vessels  in  (ireat  Britain  soon  after  the  1k- 
},'inninp  of  the  war.  The  f.;ovemmeiit  liureau  was  permitted  ^o 
underwrite  the  ri.sks  only  on  cargoes  carried  in  I'ritish  hulls  and 
the  insurance  on  neutral  hulls  and  cargoes  had  to  he  taken  in 
the  open  market.  Since  there  was  no  competition  with  the  gov- 
ernment liureau,  the  uuflerwriters  were  ahle  to  (|uote  whatever 
rates  they  liked  without  fear  of  losing  husiness.  In  September. 
lltH.  cargoes  in  British  steamers  were  lieing  insured  for  four 
g^iineas  per  hundred,  liut  cargoes  m  Dutch  and  Japanese  hulls 
were  pa,\  ing  private  companies  si.\  and  seven  guineas. 


The  Continuation  of  the  Government  Bureaus  after  the  H'ar 

The  government  war  risk  hur^us  upon  their  establishment 
were  regarded  universally,  even  by  the  marine  insurance  under- 
writers, as  highly  beneficial  institutions.  But  already  their 
future  is  being  viewed  with  suspicion,  especially  by  the  business 
world,  now  that  the  insurance  market  has  adjusted  itself  to  the 
changed  conditions.  The  fear  is  expressed  in  the  United  States 
that  the  bureau  is  only  a  forerunner  of  government  ownership 
of  a  business  that  has  always  been  a  ])rivate  enterprise.  The 
bureau  is  being  branded  as  socialistic  and  iiostile  to  the  r;,:.;hts 
of  the  individual. 

The  editor  of  The  Economie  World  in  the  issue  for  April  1, 
lOlC,  opjiosed  the  continuing  of  the  government  bureau  beyond 
the  period  of  two  years  provided  for  by  the  act  creating  it  in 

'  l-mrplay,  July  29,  I9I5.  p    187. 


70 


INI-nl-.XCK    nl.     TIIK.    'iKtA  I     WAR 


I'OS    rlllPPlM. 


r ;'::::. «::-";:."' *.-,...„„.  con..,.. 

Xr  the  .an-.-  tnn.  it  is  «eH  i"  keep  dcarls    l^etore  the 
continually  in  miw! 

MaKINI-     INMRAXCF.   ANT.   WoRri-  TraI.F. 

The  u.r  has  l.ronKlit.  and  i^  hrinsinf?.  '"any  lessons  forcihly 

r    n  ,he  rroucl  position  it  occupicl  seventy  years  ago  to   he  u. 

1    aL"  the  \nierican  flag  at  the  outhreak  oi  the  uar     An 

:S;:     •"  2    Inaal  to  re,ne.ly  the  nnstake  and  a  tleet  o.  nter- 

hi      vesM^ls  is  now  leaving  our  shipyards  winch  w.U  soon  re- 

M21  1-nited  "States  as  a  powerful  commercial  nation. 
^^'b  ;t  ^i-^tliv  "art  o/the  foundation  of  nUernationai 
,r^    Mr     rvans.    pre'idem    of    the    Continental     InsuratKC 
; -iatw^n.!  the  Ficlelity-Phenix  Insurance  Company,  recently 
.omewhat  overstated  the  financial  side. 

,,ther  two  iactor>  will   De  exposcu  Brita  n 

inevitably  bring  wa>te  or  loss   >V.^°  f  ^      vorld    e^^^^^^^      she 
ha.  o.nunanded  the  tore.gn  tra.U  ot  tic       r  I    ec 

s^^:t:;t.^!r;:isr;:ii:n;;;-v';is.e  dollar  of 

;;:;";!;  tJ^i^le.  when  possiWe.  with  her  own  insurance. 
The  Federal   Reserve  .\c:  opened  the  way   for  the  bankmg 

•    ,         1  f  the  r.uted  States  in  u.)r!d  trade:  uur  merchant 

inilependcnce  oi  tlie  i  imcii  r>i<ui.. 

•.s>,rM(..r.  X<.v.mb.r  15,  1917.  I..  206. 


THE    KFIKl  TV    OK    TIIK    WAR    ON    MARINE    INSt  UANCE 


71 


marine  is  l)tinj,'  ret- staitlisheil ;  the  third  memlx;r  of  the  coin- 
merc'Tl  tria<l,  insurance,  must  not  \k  ne;jlei.te(l. 


(Ihowth  of  Marine  Insiranoe  in  the  L'nited  States 


It 


SiNci:  u)[4 
Iwei 


is  true  that  thire  has  Iwen  u  marked  j^rowth  in  the  insur- 
ance facihtics  of  the  United  States  since  liil4.  Before  the  war 
there  were  about  l'4  marine  insurance  companies  operating  in 
Neu  ^'ork  City.  In  Octolwr.  HUT,  there  were  s7  companies  of 
whicli  .">:t  were  American.  At  the  close  of  l!}l«i,  the  reports 
of  the  -i'J  marine  insurance  companies  reporting  to  the  State  of 
New  ^drk  showed  that  durinj;  the  preceihnjj  year  they  had 
issued  insurance  to  the  amount  of  $1,214,111),4;J."),  an  increase 
iver  I'.U.'.  of  41  per  cent  and  tliat  the  total  income  of  the  com- 
panies tor  the  year  was  over  .t.'.  »,(HHI,(mm),  an  increase  over  I'Jlo 
o!  ahout  40  per  cent. 

hi  t)ctol)er.  1!>1T,  announcement  was  made  that  an  American 
Lloyd's  had  iieen  cstalilished  m  New  York  City.  The  Old 
iJelmonico  liuildinj;  has  l)een  leased  and  will  he  remodeled  as  an 
msnrance  exchange.  There  iiderwriters  will  meet  and  he  pre- 
pared to  accept  !)usiness  offered  without  the  many  delays  caused 
hy  the  present  decentralization  of  insurance  facilities. 

The  President's  Proclamation.  July  14.  P'lT.  closing  for  the 
duration  of  the  war  the  .\merican  hranches  of  the  German  ma- 
rine insurance  companies,  opens  a  new  field  to  the  American 
companies.  \o  doubt  British  competition  will  !)e  keen,  but  the 
growinfj  .American  companies  should  be  able  to  retain  the  i  :ajor 
share  of  the  insurance  in  this  country. 


A   Lesson  of  the  War 

War  has  shown  the  weakness  of  the  structure  of  our  inter- 
national trade  built  u])  in  times  of  fancied  security  and  the  in- 
ternationalism of  capital.  Our  commerce  was  paralyzed  and 
foreign  markets  were  closed  to  us  because  of  the  lack  of  ma- 
rine insurance   facilities.     Shipment  of  gold   from  the  United 


TJ  IMI.IKN.  r,    UK     rilK    CKKAl     WAK    IIM.N    SII II-IM  Nii 

Stati>  was  i-ftVcttiallv  duckcl.  lK;nertcial  as  such  rt-strictiun  may 
have  l)fcti.  Sudi  iiitirtcn-nce  with  our  a-inmcrcc  will  !.c  jxi^sible 
ju-^t  a.  luiiK  a>  wc  coiiiiinie  t..  .Icpcml  entirely  up..n  f.reign 
oitnpaiiies  f(-r  our  tnariiu-  iii>uraiice. 

Two  renmlics  arc  open  to  the  people  of  the  Uuite.l  States 
involviiiK  two  oppoMU-  economic  concepts.  I'irst.  we  can  develop 
a  national  independence  of  marine  insuranc-  facilities  just  as 
we  are.  lor  the  mome:it  at  least,  develoiiini;  our  shipping  inde- 
pendence. Thriaigh  government  subsidies  and  restrictive  legis- 
lation,  prohal.lx  involving  higher  cost,  we  can  encourage  the 
establishing  of  marine  insurance  companies  and  underwriters 
associations  which  can  be  conducted  profitably  because  of  the 
government  ai.l  and  despite  the  .scarcity  oi  .  ipital  and  the  high 
rate  of  interest  prevalent  in  this  country. 

Secondly,  we  can  establish  by  congressional  action  the  neces- 
sarv  machinerv  to  create  overnight,  in  case  of  war.  a  govern- 
ment war  risk  bureau  similar  to  the  present  one.  Or  the  present 
bureau  can  be  mr.de  a  permanent  i.-ireau  to  be  put  into  operation 
only  in  case  of  a  national  emergency.  With  such  a  latent  remedy 
always  at  hand  we  can.  if  it  is  less  expensive,  continue  to  depend 
in  times  of  peace  upon  foreign  companies  for  our  marine  in- 
surance, purchasing  in  the  cheapest  market,  whether  that  mar- 
ket be  i:,'glish,  French,  or  Japanese. 

Of  the  lwo  schemes,  the  ■second  is  undoubtedly  the  safer  policy 
to  follow.     I'nc.niraging  a^  has  been  the  development  of  marine 
insurance   facilities  m  the   L'nited   States  during  the  war.  it  is 
doubtful   if   tlii-^  develupmem   cm  continue   without   substantial 
government   aid   when   conditions  of   international  competition 
have  i>een  u'Stored,     LalH)ring  ii-  we  are  under  the  handicap  of 
high  construction  and  operation  co>t-  of  our  merchant  marine. 
it  is  important  that  we  secure  our  insurance  in  the  cheapest  mar- 
kets if  we  expect  lo  compete  Miccessfully  with  the  ships  of  other 
nations.     The  experience  of  the  nations  at  the  outbreak  of  the 
l.resent  war  is  ample  proof  that  national  indei)endcnce  of  msur- 
,ince  facilities  is  n..l  sufficient  protection  again>t  blockade  of  the 
merchant  licet.    The  merchant  marine  of  Creat  Britain,  backed 


TJIK    KKIKCTS   OK    THE    WAR    ON     MARINK    INXRAM  i; 


73 


hy  Lloyd's  Association  and  the  powerful  British  marine  insur- 
ance conipanics,  was  as  effectively  blockaded  during  the  first  days 
of  the  war  as  was  the  merchant  marine  of  the  United  State-,  ile- 
pendent  upon  the  (ierman  and  !5ritish  companies.  \ot  until 
the  British  (ioverrment  War  Risk  Scheme,  accei)ted  by  Parlia- 
ment a  few  days  before,  was  put  into  operation  was  the  lilnckade 
lifted  ;.nd  not  until  the  United  States  followed  the  csaniple  of 
Cireat  Britain  in  September,  1!H4.  were  ships  of  this  country 
free  to  leave  port.  In  the  meantime,  much  valuable  time  had 
been  lost  while  the  bureaus  were  bein^  established,  rate>  deter- 
mined and  policies  prepared  and  printed. 

Dependence  on  foreign  insurance  is  very  different  from  de- 
pendence on  foreign  shipping.  Insurance,  under  a  government 
war  risk  scheme,  can  l)e  created  in  twenty- four  hours,  if  the  plans 
are  laid  in  advance:  the  creation  of  a  merchant  marine  may  re- 
quire twenty- four  months  or  more,  even  if  well  planned  in  ad- 
vance. There  appears,  therefore,  no  greater  reason  to  work  f(jr 
complete  independence  in  marine  insurance  than  there  is  in  com- 
plete independence  in  bananas  or  money  to  lend. 


CHAPTER  IV 

Trade  Dislocations  Due  to  War-Some  Possible 
Readjustments 

WoRi.imiDE  Trade  Cii.vNt.KS 
\i«l,anistan.  l.uffcr  .tate.  i.ut..iK-lK-.l  l.y  jealous  Britain  ami 
ieiK.u.  Ku.Ma.  has  Wen  a  d-scl  land,  one  of  the  last  rctujjes  nt 
uneluckcl  harl.ariMn.     Merc  hetore  the  ( ireat  War  a  wh.te  man 
went    if  at  all.  at  the  risk  of  his  life.     In  the  summer  of  UU  a 
native  of  this  no  man's  land  Kaihered  up  a  fesv  mule  loads  ot 
country  produce  and  went  .l<mn    \M  mdes  to  the  head  of  the 
ll,„.sh  raihvav  to  trade  at  the  annual   fair,  as  was  his  wont 
The  market  was  Klutte.l.     No  l.uyers  ue.e  there.     He  was  tod 
th  .t  the  Hindus  uho  usually  l)ou«ht  hi>  waies  had  K'>"e  over  the 
sea  to  a  white  manV  war.      •  Humph!  "  said  the  Mohammedan, 
••  I  don't  care.  1  will  take  my  stuff  over  to  the  Russian  railway. 
••Ihe  Russians  have  ^'oue  to  the  war.  too."  he  was  toUl.  "  aiul 
the  rail! oad  will  carry  no  fiei«ht."     Whereat  the  in.liKcne  cursed 
all  uiil^hevers  and  carried  his  produce  hack  to  his   tastnesses 
where  it  probal.lv  still  awaits  the  return  of  peace. 

Ijma  indeed  will  l)e  the  search  to  fmd  the  people,  cycn  the  man. 
xyho^-e^dailv  life  has  not  been  changed  in  some  respect  hy  the 
trade  disturbances  arising  from  this  war.  The  world  trade  ot 
I'.tH  is  no  more.  Trade  has  always  been  the  football  of  states- 
men but  nothing  like  the  .listurbances  of  the  present  has  occurred 
in  t!ic  mn.lern  ei.och.  Several  distinct  factors  have  combined  to 
de-trny  the  old  and  make  a  new  commercial  world. 

Factors  Th.\t  Have  Altered  Tkade 

(a)  Rise  of  Munition  Tnuk. 

Munitions  and  war  supi>lies  suddenly  l^came  one  of  the  major 
demands  of   world  commerce,   rather  than  one  of   the   minor 


TH ADi;    ItlSI.Ki  \TlnS>    DIK     ril    WAH  7."» 

articles,  iiid  their  lahricatioii  -iiddeiily  took  the  time  of  millions 
tif  workers. 


(b)   IMIinc  of  l-'ood  Production  ,md  Increase  of  hood  Con- 
sumpliun. 
The  putting  of  tnillii.iis  nf  men  nmler  arms  retluccd  food  pro- 
ihiction  at  once  in  tlie  warrinjj  countries,  increased  food  consump- 
tion and  multiplieil  the  demaiul  for  it  in  international  trade. 

(c-)  The  Stofpiuy  of  Exports  from  Central  Umpires  and  Russia. 
World  ccjtnmerce  was  impoveiishcil  by  losing  the  gootls  of 
(iermany  and  Austria,  due  to  the  Allied  blockade,  and  of  Russia, 
due  to  the  closing  of  the  Dardanelles. 

(d)  Declininu  Ship  Supply. 

A  diminishing  ship  supply  restricted  ocean  transportation. 
This  diminished  ship  supji;,  was  partly  real,  due  to  the  destruc- 
tion and  internment  of  vessels,  and  the  cessation  of  buililing,  and 
partly  constructive,  dut  to  the  necessity  of  transatlantic  voyages 
replacing  shorter  iiuropean  voyages,  to  the  lessened  efficiency  of 
shipping  under  war  conditions  and  also  the  actual  increase  of 
trade  in  supply  'ig  armies.  The  nunement  of  Canadian  and 
Australian  and  Siberian  troops  alone  almost  amounted  to  the 
transport  of  nations  and  their  support  over  sea. 

((')  Declining  Man  Ponwr. 

All  this  creation  of  burdens  fell  upon  diminishing  man  power, 
and  has  resulted  in  great  efforts  to  increase  the  labor  supply  in 
manv  countries. 


(/)  Prevention  of  E.r ports  to  Central  Empires. 

Commerce  was  further  embarrassed  by  the  necessity  of  pre- 
vention of  trade  with  the  enemy— a  most  difticult  thing  to  do,  as 
witness  the  relative  failure,  the  innumerable  orders,  restrictions, 
foreign  complications  and  aninmsities  that  have  resulted. 


19 


ISrKt'ENCI.    t'K    rilK    i.kl M     W  M<    'PON     -IIinMNO 


(l/)  GoiifHnunUil  Kcttrhtions  .'/  /«:'  'JfO'. 

The  ncce'<»ity  of  kfcpiHK  Ix'iue  iiuluHtrii-'^  K»'«nK  under  tht-  rc- 
(Iwi'tl  ciuidilinii.  of  lalior,  tnatcriaU  ami  traii!»|xirt  ha*  lirouKht  ;n 
it,  wake  a  train  tii  rcstrictiin-.  almost  as  rn;id  as  tlu-  blockade  of 
(•ermany. 

As  a  result  of  all  thcsr  iaii*c<t.  tin-  nation*  have  twen  comjMrllcd 
to  take  control  ot  nuliistry  almost  as  iletmitcly  n-  ihe\  liivc  of 
the  life  of  the  conscript  in  the  army.  Nations  have  f'een  rati "ncd 
as  to  the  food  they  should  cat.  Industry  has  lieen  rationed  a*  to 
the  raw  material  it  should  yet.  i'rit)rit\  orders  decide  what  in 
dustry  shall  K«-'t  supplies  and  \\liat  shall  lie  starved.  IJi^vnsing 
Iwards  have  permitted  or  checked  the  issuance  of  capital,  and  the 
Iniililinn  of  works.  The  national  complex  of  railroad  companies 
has  tiecn  weldeil  into  one  system  in  all  the  major  warring  coun- 
tries. Import  and  export  trade  have  heen  put  on  the  war  basis 
of  license  or  prohibition  as  public  nee»ls  seem  to  demand,  and. 
lastlv.  ocean  shipping  anil  the  management  of  ocean  traffic  is 
lt«'inK  i>ooled  by  the  Allies  in  a  way  identical  to  the  p'  'ing  of 
trathc  and  eipiipment  by  the  nationalized  railway  system-*  of  the 
United  States  or  Kngland. 

As  the  war  wears  along  into  its  fourth  year  (May,  lS)l>t), 
every  disturbini^  factor  is  becoming,'  niore  acute — war  materials, 
food,  man  |H)wer.  ship  shortage,  anil  the  C()nse(|uent  necessity  fctr 
more  rigoroii-  economies  of  labor,  material,  railway  and  ship 
transportation  is  even  m-re  apjiarent.  Trade  is  licing  daily 
brouK'lit  down  nearer  and  nearer  to  the  bare  bones  of  naked 
necessity. 

TiiF  P.\RAi,Ysi.-<  OF  Trade 
Statistics  can  never  measure  the  trade  disturbances  of  this  war; 
p.inh  I'ccause  they  are  incomplete,  jiartlv  because  some  that  we 
i!)i.st  ilcsire  are  unavailable,  and  i^roh-ibly  will  not  be  available 
until  after  the  war.  and  partly  because  meie  .statistics  can  not 
iiKM^uri'  .-m^uiNli.  .Xcvertbeless  the  eharts  of  vessel  niovLMiicnts 
e\Lii  ilo\ui  to  the  end  of  I'.UO,  tiic  last  year  available,  are  very 
^ijjnit'icant.  .\  comparison  of  lltl.'J  and  Utli!  shows  that  Britain 
rciiivid  fii'in  the    \r;^cntinc  a  inlllii  n  less  tons  of  .shipping,  the 


fUMn.    ItlSLlH- \TIOS*    m'E    TO    WAH  T7 

;m»vemrJU  having  »htunk  ium  i'.«Mh»,)MH)  to  l.<ii)t).'(«).  The 
oulK'ii»B  »hi|)»  i>>  Arjjcniina  icU  away  twice  u»  much.  From 
AiHiralia  Umi.ihio  inii>  le»*>ii  shipping  arrived,  whiK-  the  traneily 
1)1  the  cln-Hini;  of  Ku»»ia  !•<  '•htiuii  liy  thr  falhiiK  awns  i>f  vesstl* 
frnrii  :!,:KM>,<mk>  to  less  than  7.'t».i«n>,  with  tlrparturc*  reduced 
t'»  .111  even  i^reatti  extent,  Tlu-  hollies  »(  Norway  and  the 
United  States  show  a  sul>:»tantial  increaM  as  a  measure  of  the 
attempts  tu  replace  the  old  with  new  trades. 

Exatnin;Ui(ni  of  trathc  tnovenient->  show*  eve  more  significant 
fact^.  Coal,  ujMjn  which  our  age  de|>end!i  and  for  which  most 
of  the  impnrting  world  has  liK)ked  tu  Uritam,  shows  painful  de- 
cline in  Mritain's  exports  ltaly'>  supply  frftm  this  source  fell 
from  nearly  lO.iMJO.ouo  to  les>  than  (J.tHXi.iMMt;  Greece  lost  more 
than  three-fourths  of  her  sii|>ply;  iiKypt  nearly  a.s  much;  .Xr^en- 
tsna  went  from  over  ;J.:.(K».(MH)  tons  to  less  than  7r»0.<wo, 
csweden.  suspected  of  Ijeing  too  friendly  to  (Jermany.  ^ot  dropped 
from  »..'>0U.01M>  to  !.<MM),)MM>,  Imt  Xorway.  the  busy  supplier  of 
liritain,  was  allowe<I  coal  to  take  Iwck  in  her  ore.  wotxl.  and  pulp 
carrying  ships.  But  Denmark  and  the  Netherlands.  l)oth  adja- 
cent to  (jermany,  lK)th  in  the  zone  of  the  submarine,  show  heavy 
decrease,  which  helps  explain  the  economic  disturbance  of  those 
countries. 

For  a  time  the  gap  caused  by  the  shortajfe  of  British  coal 
was  partly  tilled  by  .American  coal    (see  table),  but  the  ship 

CO.AL  EXPORTS  OF  UNITED  ST.-KTES 
Tons,  000  Omitted 

191^          1913          19U  1915  1916             1917 

Italy    27b          JJ2           776  1.628  2,8.U           1.09"; 

'TCfci- 101  89 

Spain  16      50      42  100  160 

!•  ranee  4J      16     47  50  180 

.Arm-ntina  156      J8     1J9  564  78_'      70f> 

l*ra"l  -W7     2J6     2J9  527  681      756 

thile  29     112      84  58  152 

shortage  has  now  wiped  out  that  possibility,  as  evidenced  by  the 
nearly  tenfold  increase  in  the  Italian  supply  from  us  between 
l»i;j  and  I'.ilO,  and  its  heavy  decline  in  1!>17.  .Xryentina  had  .i 
somewhat  similar  fate,  while  Brazil,  with  coffee  and  manganese 


T.S 


IMLIKNCI-:    (W-     THE    liHHAT    WAR    ITON    SlIiriMNi; 


ore  fur  return  carpi),  has  Ijcen  able  to  more  nearly  hulil  Ikt 
American  supply. 

The  two  tacts  of  the  actual  blockades  of  war  and  the  \nu- 
gressive  bk)ckades  of  ship  shortage,  make  it  dear  why  so  many 
parts  of  the  world  are  in  industrial  paraiysis.  i'ur  example, 
Russia  with  imports  of  *:i(!.'),000,(H)(>  in  l!tl4  imported  but  *2(H),- 
(>(H»,(»(M(  in  r.>17,  and  thri'  was  an  increase  over  lltK!.  Hut  even 
this  small  trade  was  chietly  war  supplies  sent  in  by  her  allies,  for 
her  exjjort  of  $;J4!>,0U0,000  in  1!>U  had  dropped  to  $40,000,000 
in  11)1.">,  $,">;}, 000,000  in  lOKi.  and  but  $20,000,000  in  UHT. 

Perhaps  the  best  known  and  most  conspicuous  example  of 
stagnation  is  afforded  by  the  Australian  wheat  situation,  where, 
according  to  unofficial  figures,  l'00,000.000  bushels  of  wheat  are 
piled  up  waiting  the  chance  for  shipment,  for  which  the  ever  de- 
clining tonnage  gives  small  promise  for  many  months  to  come. 
The  stock  of  wheat  exceeds  by  many  fold  all  ordinary  need  for 
warehouses  and  all  possibility  of  proper  storage.  It  is  said  to 
be  piled  up  more  than  10  miles  long  in  enclosures  made  by  walls 
of  sacked  wheat  10  to  -JO  feet  high  and  10  to  20  feet  wide.  This 
drew  mice,  which  have  multiplied,  and  in  spite  of  being  fought 
day  and  night  by  gangs  of  men  they  have  continued  to  multiply 
until  it  is  estimated  they  have  destroyed  40,000.000  bushels  of 
wheat.  They  increased  to  such  myriads  that  from  crowding,  a 
plague  of  soft  ringworm  fell  upon  them,  which  in  turn  was  caught 
by  the  men  who  fought  them,  and  became  a  plague  among  the 
people.' 

The  export  of  .\ustralian  coal  which  had  gone  in  hundreds  of 
thousands  of  tons  to  South  .\merica  and  the  East  Indies,  is 
similarly  stopped,  with  shut-down  collieries  and  the  labor  unrest 
that  arises  from  unemployment. 

\ew  Zealand,  slightly  more  distant,  finds  that  the  paralysis  has 
affected  a  trade  so  valuable  and  so  vital  as  wool.  As  early  as 
March,  I'.tlG,  the  wool  sales  of  her  ports  had  been  postponed 
indefinitely  and  arrangements  were  being  considered  to  provide 
for  cash  advances  to  the  growers  similar  to  the  means  by  which 

'  Collier's  IVci-kly.  March  2,  1918.     Mark  Sullivan. 


TRADE    DISLOCATIONS    DUE    TO    WAR 


80  INFI       -NCE   OF    THE    GREAT    WAR    II'ON    S!IIPPING 

the  Australian  (iiivcrninent  hail  made  cash  advances  to  the  wheat 
growers. 

In  Argentina,  a  country  with  a  trade  consisting  of  heavy  ex- 
ports of  wheat,  corn,  tlax-seed,  and  meat,  imports  of  coal  and  the 
great  variety  of  manufactures  needed  in  a  modern  state,  the 
interference  with  trade  by  the  war  is  very  acutily  felt.  It  began 
early. 

Argentina  is  about  to  feel  the  effects  of  the  war  very 
seriously.  Imports  are  becoming  beautifully  less,  e.vports 
are  very  reduced  and  laborers  are  as  plentiful  as  leaves  in 
\'allombrosa,  with  lalwr  conspicuous  mainly  by  its  absence. 

Free  dinners  are  Ix'ing  given,  and  it  is  very  disheartening 
to  see  hundreds  of  strong  and  able  men  waiting  listlessly  to 
be  fed. 

Work  in  the  port  is  very  scarce,  and  hundreds  of  steve- 
dores, lightermen,  sailors,  and  others  wander  about  with 
their  hands  in  their  pockets. 

Business  continues  at  a  complete  standstill,  and  all  stocks 
and  shares  are  either  unquotable  or  extremely  weak.' 

Within  two  months  after  the  war  had  started  10  per  cent  of 
Buenos  .\ires  clerks  had  been  dismissed  from  their  positions. 
By  September,  r.»17,-  the  vessel  arrivals  were  50  per  month  less 
than  in  normal  times.  Our  consul  reported,^  that  "  due  princi- 
])ally  to  lack  of  shipping  space,  the  exports  from  Argentina  for 
the  first  eight  months  of  the  year  were  considerably  smaller  than 
for  the  same  period  the  previous  year,  except  for  quebracho  logs, 
skins  and  hides,  butter,  wool,  tallow,  and  frozen  beef." 

January  to  .August 

1917  1916 

Wheat    (tons)    765,919  1,597.578 

Maize  695.327  1.562AA0 

Linseed    61.958  495,331 

Oats    231,697  573,221 

Quebracho  logs  75,799  74.779 

Butter    5,965  4.237 

Wool    95.840  82.772 

Frozen  beef  ( quarters )   3,642,516  3,304,745 

'  Fairftlay.  October  1,  1914.  pp.  554-555. 

'  U.  S.  Commerce  Reports.  November  2Z.  1917.  p.  721. 

'  Ibid..  October  12,  1917,  p.  290. 


TRADE    DISLOCATIONS    DIE    TO    WAR  fil 

The  sufTering  .,f  the  people  is  indicated  by  the  fact  that  the 
previous  w.mer  coal  fron,  the  L'ni.e.l  States  had  paid  so.  a  to,' 
ocean  fre.gl.t      A  reduction  of  much  more  than  half  in  the   u.a 
CTv^^T  :'^  '''''  '"  ^^^'■^''  '"^"-^v  was  put.     On 

not  gT         "'"^ "'"" '"  '^^ '''"'"  "^  ^•'^•'''  ''^'^'^  '^'y  «■•-"''' 

and  ::;;sL;p:^r""  ^^"'"  ^"^^  ^^-^'^^^^^^^  ^'^^^  °^  ^-^- 

monf"!!'"^'  ;^"!."''^^  ""  "ot  ^"Pply  the  foods  which  wc  Com- 
monly th.nk  ot  as^necess.ties.  They  import  wheaf  cornTd 
beans,  ami  are  suffering  from  lack  of  thise  now 

hnir.  tF^u\°^-  '-■"^°^"»'s  "••  "^  bananas,  thousands  of 
bunches  which,  being  perishable,  are  thrown  into  the  sea 
weekly,  because  there  are  no  ships  to  carry  them 

busher-v^d'  cn!£lVT\'  '^''-  ^''''^  ^y  ^he  millions  of 
thrn^X  L  I  ?  ^-  ^'"^  *°  P'gs-all  of  which  are  lost 
tnrough  lack  of  organization.' 

A  biilky  product  like  lumber  is  naturally  one  of  the  early  vic- 
t  ms  of  declining  tonnage.  Months  ago  we  sent  regiments  of 
American  lumberjacks  fully  equipped  to  France  and  IngS  to 
produce  in  Europe  what  we  could  not  ship  across  the  sea'  From 
San  Francisco  came  the  complaint  more  than  a  year  ago  oT 
Mr.  J.  J.  Donovan.  President  of  the  Pacific  Loggin'g  Congr'es^! 

nn^th?  P^  -7  ^^''^  ^^'''  '""^•''^  ^h'Ps  fo"-  the  foreign  trade 

mills    re  :£;  Ti  °'''"^'  ^^^  ""'^  ^'•^-^'  -^-"y 
fin    fhlf!!.  ,      A    ^  ^•°"^'^"  '""P'  °"  ^'h'ch  we  depended 
find  the  food  and  munition  trade  with  the  warring  nation  J 
o  remunerative  that  there  is  little  space  or    houSt  o 
lumber,  except  for  military  purposes.^  ^  '   °^ 

cal  an^MS^"^^^^^^  Academy  of  Politi- 

and  wh^r■^l;?:ict^Ta"pI■XLtt^;tr''^^  "^'^'^  ^^'""•^^  ---  -^<le, 
IJetween  1914  and  1916,he  lumber  ex,  om  of  h''"v^?"  '^°^  ^°"'''^*  ^'s  bills 
declined  from  1.279,(X)0,()00  feTt  to  7(Kmo«X)  F  ''*'!^  "ii"^  ^="'f  "^sts 
centage  of  loss  was  greater  t>om  nsoivHi'??^'  i^jT^'ilS,  ^''"^<=  «''e  Per- 
further  declines  in  1917.  A  he Ty  PacTc^nnr,^^/*^'"*^'  """^  "'"^  ^"<= 
ne..vy  racihc  export  of  shocks  and  staves  fell 


82 


IN|-1.I'K\CK    OK    TIIK    C.KIAT    WAR    I'PON    SIIIPIMNO 


The  tralVji-  .>f  thu  Sue/  Canal  is  a  siinf;^''*''^^^'  '"''^"^  "f  '''^  V^'^R^^ 
i)f  the  wiirld'-i  trade.  In  I'.'i:.  flu-  trat'tic  had  tallfii  S.i.^  pir  cent 
hel.iw  tlut  nt  l!»l:!  which  was  slightly  above  -.'((.(HlO.diMi  net  ton-. 
This  reduction  w  -  Imt  little  more  than  the  amonnt  ni  (ierman, 
Austrian,  and  TuiKish  tonnage  passini;  in  l'.U:l.  hut  the  l'.»17 
t"nnaj;e  of  s.aoo.ouo  tons  was  a  45  per  cent  drop  from  1.'>.K><>,- 
UM(»  tons  of  r.n5. 

Some  of  the  industrial  deadenings  due  to  the  war  must  con- 
tinue and  even  increase  until  the  war  is  over,  or  at  least  until 
shipping  increases,  while  others  arc  temporary,  such,  for  example, 
as  that  of  .he  Chilean  nitrate  business  w  hich  declined  in  the  early 
l>art  of  the  war,  but  which  has  risen  to  greater  heights  than  ever 
as  the  increased  demand  for  material  for  explosives  has  sent  the 
ships  of  the  Allies  in  ever  increasing  numlwrs  to  the  nitrate 
ports.' 

An  rican  cotton  also  has  had  its  decline  and  recovery.  The 
temporary  paralysis  of  1!>14  and  1!U.'»  caused  the  price  to  go  to 
an  exceedingly  low  and  unprofitable  point,  which  upset  the  whole 
basis  of  industrial  life  in  the  cotton  l)eh,  and  created  depression, 
very  general  discontent,  and  some  anti-English  feeling.  It 
caused  the  national  agitation  and  campaign  that  every  man  should 
buy  a  bale  of  cotton,  the  President  himself  buying  (jne  to  set  the 
example.  This,  however,  has  long  since  passed  away,  but  the 
possibility  of  partial  return  is  indicated  by  the  shutting  down  oi 
British  mills  in  the  spring  of  1!>1H,  for  want  of  raw  cotton. 
However,  the  cotton  belt  is  now  safely  launched  upon  the  sub- 
stitute industry  of  raising  meat,  for  which  it  is  so  well  fitted,  and 
for  which  the  demand  is  so  unprecedented. 

Of  all  the  trade  disturbances  caused  by  the  war,  perhaps  the 
most  conspicuous  were  those  induced  by  the  cessation  of  the 
German  export  of  her  erstwhile  work!   mcjnopoly   supplies  of 

away  almost  completely ;  the  Pacific  export  of  railroad  ties  dropiwd  from 
1,100.000  to  500,000  but  the  nearness  of  the  Atlantic  to  the  war  bases  in 
France  caused  the  Gult  and  Atlantic  coasts  to  increase  their  shipment  of  this 
war  supply  threefold,  to  2,500,000  ties. 

'  Despite  heavy  shrinkage  in  other  parts  of  the  world.  Hritain  incrci^ed 
her  entrances  from  Chile  from  150,000  to  350,000  tons,  while  the  movement 
to  the  United  States  increased  from  510.000  tons  in  1V13  to  720,000  tons  in  the 
first  ten  months  uf  1917. 


TKADK    DISLOCATIONS    DL'E    TO    WAR  SJJ 

Chemical  .Ives  an.l  potash,  l-or  a  time  many  texfik-  ma.nifac- 
tnrtrs  rct.,sc.l  t..  guarantee  their  coK.rs.  ami  Knglan.l  and  th. 
I  ime<l  .States  were  compelled  to  diligentlv  create  a  new  dve 
m<lustr>.  Ilu-  vmerican  success  is  registered  '  by  the  increase 
in  our  exp,  ft  ..t  Anie-ican  ma.le  dyestuff  from  iKl.L'oo  iH)o  j,,  the 
first  seven  n)„nth>  in  V.nr,  u,  $H,m),imn  in  ,he  corresp-mdinu' 
!.«.T.nd  t.vo  years  later.  Our  .lyestuflf  trade  to  France  jumped  i,, 
h.s  two  years  from  .»:>.10.()()()  ,o  more  than  *1.<K)0.(M»(»-  to 
Lnitcd  Kmjs'dom,  fnmi  *:)00,()00  to  $l'.(»oo.OUO. 

U  ith  potash  the  substitution  has  been  'far  less  satisfactory 
Ihe  tamme  st.JI  continues  to  the  great  injury  of  potatoes  ^  and 
maiiy  other  crops  and  many  manufactures,  despite  the  fact  that 
we  have  busily  ,lre,lged  the  bottom  of  the  .sea.  burrowed  in  the 
l.e<ls  of  .\eva.la  lakes,  tunneled  the  Utah  hills,  and  exi.erimented 
in  many  lalxiratories. 

The  greatest  of  all  the  trade  disturbance^:  .vill  be  the  most 
ephemeral,  but  also  the  most  revolutionary  while  it  lasts:  namely 
ttie  food  trade. 


The  World's  Food  Supply-A  Measire  ok  War's  Trade 
Disturbances 

The  war  fell  upon  the  earth  in  a  way  to  embarrass  peculiarly 

he  mternat,onal  trade  in  food,  and  the  Allies'  food  supply.     All 

the    \  est  European  Allies  are  heavy  food  importers  and'all  the 

the  habu  of  Western  Europe.  From  Norway  clear  around  to 
Greece,  mclus.ye.  no  country  produced  all  of  its  own  bread  or 
meat  and  some  of  ihem.  especially  Britain.  Norway.  Sweden 
and  Denmark,  were  almost  as  dependent  upon  outside  supplies 
as  New  England  itself;  France.  Spain.  Portlgal.  and.  to  a  fess 
extent  Germany,  were  also  food  importers.  Even  the  beasts  of 
all  these  countries  depended  to  some  extent  on  imported  food 
I  U.  S  Coiii»i,-rrf  Hrforli.  October.  1917,  p  271 

would  have  witlUood  iiid7qu»U\yUAonJ^^^^  ^h^^''   'hey 

portant  to  this  crop.  ^  °     Potash.  which  is  peculiarly  im- 


fi4 


INFLlKNlE    (IF    rilK    t.KKAT    WAR    ffON    SIIII'HNO 


and  in  HollumI  and  Scandinavia  they  de]>ciHicd  to  a  K^cat  extent 
upon  uver»ea  >u|)plie!t  uf  cutton»eeil  meal,  uiUcake,  hran  and 
Indian  it  mi. 

There  were  six  Mjurces  fur  these  vital  imjKirt  ^ul)|)lies  uf 
Western  I'viroiH.-;  the  Haltic  Sea.  the  Mlack  Sea.  North  America, 
the  River  FMate,  India,  and  Australia.  The  lialtic  wa.s  instantly 
closed  ii|K)n  the  dec!-  ation  ot  war,  for  the  (lernian  navy  made 
trade  with  Russia.  Maltic  urain  exporter,  impi  ^^ihle.     In  a 

-short  time  the  c  ce  of  Turkey  into  the  war  shut  otT  the 
niack  Sea.  whit...  as  the  outlet  of  Bulgaria.  Roumaiiia,  and 
South  Russia,  was  the  greatest  wheat  exporting  district  of  the 
world.  This  threw  the  .\Ilics  hack  u|K)n  the  grain  npply  of 
North  .\merica,  the  River  I'late.  India,  and  .Australia.  Of  these, 
the  last  two  were  relatively  unimportant,  and  the  I'nited  States 
happened  for  two  years  to  have,  from  its  standpoint,  a  streak 
t)f  agricultural  good  luck,  which  has  probahly  turned  out  to  be 
.\llied  lad  luck,  for  it  kept  us  unduly  asleep. 

It  so  happened  that  in  1914  this  country,  which  had  had 
wheat  crops  averaging  TO.'i.OOO.OOO  bushels  in  the  three  pre- 
vious years,  had  the  biggest  crop  ever  recorded — m!»i.017.(M)0 
bushels.      That  enabled  us  to  have  a  surplus  for  Europe  that 
season.     Also  Europe  had  a  fair  crop.     Then,  by  the  same  luck 
which  enables  a  gambler  occasionally  to  throw  two  double  si  .. 
in  succession,  the  crop  of  1!»1.1  was  again  the  biggest  eve. 
1.01  l..')0.'i .()(«>  bushels — and  we  shipped  to  the  Allies  a  total  c 
•.'4:i.(i()(),()(Mi  bushels.     The  I'.Uii  harvest  dropped  lack  to  rat'.-r 
below  normal  size — fi4<»,0(H),0()(»  bushels;  in  liHT  to  titiO,U(KJ,- 
KOO  bushels. 

The  phenomenally  big  crops  of  IIU 4  and  I'.'l.')  coming  as  they 
did  with  the  decline  in  shipping  let  a  smaller  tonnage  supply  the 
.Allies,  because  the  wheat  was  unusually  nearb).  It  also  kept 
bread  price  down  and  served  to  prolong  our  dream  that  the  war 
was  ;i,(Ui(i  miles  away,  and  hid  for  one  full  year  the  real  facts 
of  ship  shortage  and  food  shortage.  Then  the  normal  crop  of 
ll'ltj,  coming  with  the  increasing  ship  scarcity,  showed  that  for 
ll'lT  the  usual  supplies  coulil  not  be  ilrawn  from  India,  .\rgen- 


THA..K    I>l!«U)C,\TIONS   DIE    Tl.    WAH  ^5 

tina   and  Am.ralia  l«c.u«  of  the  .b.«Iute  scarcity  of  ,o„n-,„ 
\".I  wc  ha.l  ,lcpt  one  year  ,.k.  long.  no,.,,,.,in.  c  uri  v   ^1 
Pnnmg  of  a  ,K,Iicy  ..f  .hiplu.il.linK.  ' 

III  the  meantime  the  nee-ls  of  W  estern  Furotv  u.r    i 
vet  greater  an.l  greater.  l.cau.  .he  h  ."     "npTua    Ja  ,"7'."' 
"  'he  shortage  of  n,a„  ,K.wer.  I.a.t  powcr^aml  f  r  ,i «  '  '  W 

The  measure  of  this  pinchin^  of  the  worW.  .r„i    •    / 
the  rationing  of  the  peoole  of  hIiI  i  .        "  '"  ^"""''  '" 

reduced  to  fhe  point  whe  e  LtT?  ""''  '*"""  '"  "''°"'' 

-wead  of  t«f«rci::j:x:rdr.t'"t  r  1"t  .'^  ''^ 

food  shortage  has  Income  aTmo,t    Xi  and  7   "'  ""  "'^ 
condition  that  may  wen  ^  said  to  ^^l^i^,;::::—- 


TiiK  Dislocation  of  Trade 


waste  motion  and  shorten  dstan.         .1  T"*^  '""'''=  *"  '^"^  °"» 
quantities  of  .oo.^:!^  :^^'^ ^^^"^^"^  "^  the  small 

Asa  result  we  are  learninLMwo, hi,  "'*  '°"^*"'  't^*'^- 

to  go  the  short  rou^S     ha tt^Lr  *'' Tht"'  T"""''  ^"' 
being  partly  rerouted.  ^''^  '"'"''^  ^  •^*''«  i* 

Rerouting  of  Trade 
When  shipping  revived  in  the  autumn  of  1»14  .h. 
temporary  paralysis  in  manv  localitie    due  to    he    I        '  '""'  " 
of  German  ships  and  Ckrmin  Z,l\,r         ^  ^'^appearance 
had  been  carried  to  t^Sed  State    tr"""''"  '''''  "'''^^ 
transshipped  for  a  time  at  L  ^o    '  V^- ^^^^^^^^  --'^-  -- 

on  new  direct  service  from  the  /^niMS::;::^::.;^  a;:  r 


Srt        isru  KMT.  OK  Tiir  imrAT  w.\h  i  i-on  i*iiii'riN«i 

Italian  iio»rrnnifm  aitkil  new  I  ilian  linct  «lircct  to  the  Lnitcd 
StatC!*  tn  replace  the  (icrman  lint*.  New  line*  went  frotn  .Xmer- 
ica  to  Scan<lina\ia,  hut  next  t.»  the  «n>ply  i''  >hip«  »o  the  <ene  u( 
war  iltilt,  the  ^'reate^t  ■'inijle  rearran|{cinknt  was  the  traile  .>{ 
.XrchatiKel.  the  oiilv  Kurojjean  outlet  for  over  l<H».<M)0.tM»o  |H'<.ple 
enfjajjeil  in  war  l)C!»pite  its  liniitetl  connection  witli  the  rc<t  of 
Kiistia  through  a  sinxlc  track  narrow  yauRe  railway,  m.  tnH<h 
tratVic  wa>  tlir.>wn  there  that  in  the  Mimrner  of  l!»i:.  it  va«  a  |)ort 
in  rank  i«ccontl  only  to  New  York  in  numlwr  of  vessel*  arriving 
anil  cicarinj,'.' 

Kiis.ia  made  a  further  attempt  at  outlet  liy  promptly  c*tal)li:*h- 
injj  new  steamship  linen  from  \la«livo-*tok  across  the  I'acitic  to 
Seattle  ami  llriti^h  Columbia,  which  of  course  meant  lonKer  voy- 
ages and  more  'uppin;,'  to  render  the  same  service  that  hail  pre- 
viously lieen  riiidered  by  the  »h  >rt  voyage  from  Baltic  ports  to 
Britain.  It  also  meant  partial  transfer  of  stiurces  of  Russian 
supplies  from  Britain  to  Lnited  States. 

Ri'dKction  of  Entrepot  Trade 

The  elimination  of  the  entrepot  trade,  so  far  as  possible,  is 
one  conspicuous  feature  of  the  trade  «lislocation.  In  times  of 
peaif  -.i  surprising  propcjrtion  of  the  world  trat'^c  was  trans- 
shipped at  some  convenient  pjrt  which  held  this  business  for  the 
double  reason  of  excellent  shipping  connections  aixl  the  estab- 
lished force  of  market.  For  example,  large  <|uantitifs  of  .Aus- 
tralian wool  were  shipped  to  the  L'nited  States  by  way  of  London, 
tor.  desi»ite  the  fact  that  there  were  direct  vessels  going  iMJtween 
tlie  L'nited  States  and  Australia,  the  London  wool  auctions  serveil 
as  magnets  to  keej)  the  business  moving  by  the  old  and  more  cii- 
cuitoHs  channels.  Liverp<iol  was  a  great  transshipping  port  for 
.American  cotton,  likew ise  Bremen.  American  tobacco  was  trans- 
shii)i)ed  all  over  North  Europe  from  Bremen,  Dutch  coU^nial 
produce  from  .Amsterdam.  African  produce  from  Antwerp,  and 
so  on.     The  list  might  be  extended  to  greater  length.     Now  the 

'  Marine  Hcvieu:  May,  1916,  p.  171. 


T«ADK   DISUKATIONJl   DL'K    TO   WAR 


S7 


lri|.lr  pre»,urr  of  actual  W.Hrka.lc.  »hip  .horug..  an.1  g,nftn- 

mental  interference.  ,.  rapNllv  .loing  a..   >  with  thi*.     Of  course 

Uremen  ,  t.lMco,  ami  cott..,,  |„„i„„»  j,  ^.,„^  perforce,  for  the 

«"«H-  Ix-M.K  u.  least,  and  ilaiti.    which  ha.l  previou.lv  ^,„  her 

tohMCo  l»  Ifollancl  via  H.enwn.  now  »en.U  it  to  .\m  tenlam 

«l.rect.      In   !!»!:.  a   Dutch  cotton  ..s^^Kriation   wat   formeil  in 

K..tter<lam  -   to  hamllc  cotton   which   ha.l  previously  come  hy 

nremcn.  an.l  lar^'e  lire-pr.H,f  warehouse,  were  Iniili  to  handle 

•t.      rhc  conKc*ti..n  of  the  Italian  por.  of  Gem*  '  in  U»15  wa» 

partly  due  to  the  .u.l.len  ri*e  of  a  w.k.I  import  Inuines.  direct 

rem  the  River  Plate.     liefore  the  war  .Argentine  w.x.1  cam,  to 

Italy  throuKh  I- ranee  and  .\ntwerp.  cleanwl  and  rea.ly  for  npin- 

n.nK.      rhis  Ims.ne.H  wa.  aL^.lutely  en.led  by  the  war  and  Genoa 

iwd  to  erect  ,v..ol  cleaning  and  washing  works  to  handle  the 

direct  importations. 

Much  Dutch  Kast  Indian  pr.Hluce.  coffee,  rubber.  tol«cco  etc 
previously  ship,«d  to  the  Lnite,l  States  via  Amsterdam,  i^ 
rcporte.l  shipped  direct.'  In  this  case  ship  shortage  is  assisted 
by  the  restrictions  which  the  Entente  Powers  have  placed  on 
Dutch  imp..rts  for  fear  of  ultimate  transshipment  to  Germany. 
England,  however  lacks  this  factor,  so  that  a  recent  or.ler. 
Novemiier  .'1.  l.M7.^  shows  the  e.xtremity  to  which  the  world  is 
brought:  for  this  order  is  a  <ieliberate  annihilation,  for  the  pres- 
ent at  least,  of  .ne  of  the  most  precious  commercial  treasure  .f 
he  Hritish  Imp-'c-London's  entrep6t  trade.  For  genera.  ,ns 
London  has  lni.,cd  and  fattened  herself  as  a  rehanu.er  of  ,.aer- 
national  trade,  the  world's  greatest  entrepot."  and  now  comes  a 

l^-.^,fomm.-rc,-R,-6orij.  October  30,  I9i:.  p.  401 
The  kconomtc  n  orU.  February  10,  1917.  p  ill 
/•air/./av.  January  J,  1916.  n  7/  ^' 

•  /a'.j     I  """""^  Kfporu.  October  J,  1917.  p.  190. 
^  Ihd..  January  17.  1918,  p.  209 

Lon^^  K^^^^^^^^l^:^^-^^  of  the  Port  ,, 
J^S^:^^,1^;'^t^  Zt-^P^'-'     "  "jve,  far 


M 


lNri.riiM-K  or  nir  i.inAr  w  ak  ritiN  Miiri'iMi 


Hriii.h  t-rtlcr  lliai  im  |{«nmU  fur  f-'rawv  may  Iw  »«>«(  \iii  I'nitland, 
ki  fcrriin;  i.f  ilu-  ilirtirnltu.  >'i  .m\  rrpx|fc.rtaluiii.  latrfUts  com- 
|ilaiii»  rtJitoriatt),  Dttrmlirr  .'t,  ItMil: 

Fiirlher,  in  the  ca»f  •>f  c<>fYf*  ami  of  «»mc  «nrt<  >it'  spice* 
whuh  arr  not  inii-.titm-.l  iu  any  extent  in  I  nijlaml.  the  nn- 
l"Titiii.iic  merchant,  \\\\>>  h.«.|  tieen  a  ked  t<i  continue  e\|K>rl 
iraile.  i*  now  miIiIIciI  with  a  Ininlcn  which  he  has  him»cli" 
rtnancetl.  and  which  he  will  not  lie  ahic  t..  unluail  until  the 
return  of  jn-ace  eiialdc^  liini  to  re*unie  hi-  U'^ual  v.K,-atioii ; 
which  i->  a  |N.^ition  at  which  even  the  neilithneiDi  of  a  rcd- 
tajt*-  worm  would.  I  ■.houUI  think,  gird. 

ihaniifs  in  the  .Voi/rcc  of  Sufply 

Thin  clan*  of  disluc.ition  ha*  lieen  wurldwide.  with  innunieraiile 
example*  ariMiij;  from  the  cmlpined  inthieiicc  of  the  blockade, 
the  difKctittie*  of  tran*fM)rt  iur  the  tinished  produce,  inal.ilitv  to 
secure  raw  material,  or  inability  to  make  the  koimU  iheni'«elvc* 
l)ecau>.e  uf  pre->»ure  nf  war  work.  The  followjnjr  are  *oiTie  typi^ 
tal  example*  of  thi*  tyiMr  of  tratie  changes. 

hii>  maitr  Loiulfin  liai  Ihtcii  the  farr)mg  on  of  it*  hugr  cnirepiif  tr»de  durini 
llif  la«t  .Ulll  year* 

l.)tla>    tturi    arc  MKt.dilO  t»ti>  of   itii.>H«   in   the   warfhmt«f,  of   ihr    f'i)rt 
\iilhorit),  ami  wlun  thr  •IkU.  at  ihr  i>lhtr  public  wartli"ii«r«  arr  acldoil.  we 
laii  rtckiiti  uii   l.lHXI.OtKl  ion»  of  j(iii..U  tuniK  in  the  port     Thi»,  uf  ci<ur»i 
altoKether  leaves  out  of  account  ill-  vti.ck-  of  dealer*  or  ihopWeiiKT* 

ju^t  a>  tver>  cla««  of  manufactured  article  can  W  ohtamrd  at  the  \\e«t 
iiid  .tore>.  MP  the  Krcal  whole»ale  tnarUii.  on  the  laMern  «i<U'  of  I  ondon 
offer  the  world  the  choice  of  the  prodvictn  of  the  world  in  hulk— wool. 
f.inl)er.  tea,  rubfier.  tobacco.  »u»(ar,  cottce,  cocoa,  spice-,  wine,  brandv  rum 
mi'tal»,  i\or>.  ostrich  feathers.  druK' 

U.Kd  represents  the  largest  value  of  the  importations  into  London,  and  it 
affords  one  of  the  most  strikniK  examples  of  the  emr.pot  tr.ide  I  )f  the 
-J.IXNI.IMKI  pound,  of  wind  cominu  into  London  every  year,  prartically  none 
remains  in  London.  ,\hout  two-fifths  i,  purchased  by  loriign  buyers  the 
rest  K„r,  t,,  the  manufaclurinB  districts  nf  ,Hir  own  country.  Th.  wool  is 
lirouRht  to  L(m<lon  merely  to  be  -.M  The  same  fact  largely  applies  to  the 
other  goods. 

Ivory  nay  also  l»e  mentioned  as  an  inst.mce  of  the  magnetic  power  of  the 
Lot  ,l.in  market.  If  you  go  into  the  ivorv  -howro.m  <>i  the  London  dock 
}ou  will  always  see  some  barrels  of  -mall  piece-  i  ivory  from  \merica 
Ihese  puces  are  the  discarded  shavniK-  "I  tusks  oriKinallv  sold  in  London 
to  .Mtiericaii  buyers  The  shaving-  are  -ent  lure  for  -ale  from  .\merica.  and 
it  mav  well  hapiwn  that  some  of  them  will  hf  purchased  bv  .American-  for 
pianoforte  keys  or  backs  of  briishc-,  and  so  have  a  third  v'ovage  acros,  the 
.Atlantic  iH-foir  hemg  (.-,  ,lly  used."     l.l„U'i  Wcckh.  October'.'.  1914   p   ()."> 


rn.sm  imuKstMS*       t  m  war  gp 

I...t.K  rivalry  in  th«  .\r|{rmiiHf  l*fwwn  ihr  Vntrncan  ami 
Hrili.h  iiirat  t..m|Mnit»  en,|c<|  m  Sr|)tetnlwr.  |!»||,  |,^  ,hr  ,hii>- 
mctu,  from  ArReniin* '  t«  Am*rt«  l*cing  cn.iKtir.!  t,.  ihc 
ArnrrKi.n  rathrr  than  jhr  itriiiih  i..nii»anic» 

Th-  cLmmg  ui  Ihr  llaliic  whrncc  nriti»h  ...llirric,  had  f.,f 
year,  .traw,,  ihcir  «ip,,lir,  „{  mmc  pmp,.  „rni  a  .i-putati-m  of 
Jinilwr  «iiv,i  t..  Ncvvfuumllan.1  |>ro,|m(in|r  (.-  ir-v  RUDolien  in 
Scptcmkr.  ItMl,'  '^' 

In   I>ncml*r.    11.14.'  ih«  imp..rfm  .,  t^igjan  ConKo 

lurncl  tu  America  for  the  ,Hp,,|ieH  which  .  j.revioiuly  come 
from  luropc  via  .learner  li-ts  that  were  then  thomughlv  .li*. 
orRanued.     America  i»  Mill  leetlinR  WeM  Africa  direct      ' 

The  Spanish  »•«  exp.jrt  jumped  from  2.0(M»  u>m  in  1I»U  to 
l'.<«>0  in  llti:..  Iwcauw  of  the  .li^iurfKince  of  ihe  Turkish 
( Smyrna),  (ireek.  and  ?  alian  trade  in  this  prinluct  ♦ 

Irom  the  province  of  Amoy.  China,  comes  the  report'  that 

he  indiKo  industry  which  ha.l  In-en  .ilmost  kille<l  out  .luring  the 

last  t«enty-(.vc  years  hv  the  im,)urt  of  Cerman  aniline  dvcs.  has 

l.y  the  >hutt.nK  off  of  this  trade,  been  restored  to  the  p.,int  of 

again  supplying  the  local  needs. 

Otir  consul  reports "  that  in  Sumatra  many  articles  previously 
M.ppl,e.l  from  l.«ro,H.  ,  v  come  from  America,  such  as  auto'- 
molMles.  patent  medicii  chemicals,  f^ifet  articles,  household 
go<Kls,  etc. 

The  drup  import.  ..f  Paraguay  '  show  that  the  suppiv  ..f  .Irugs 
from  (.ermany  )  .d  .lisnppeare.l.  from  France  thev  ha.l  shruill 
to  .        If  h.  .-ind    ,-  m  Uritain  to  one-half  their  former  import- 

Z.,:n.tl.''  '"'"'-  '^""^  '''  ''"'-'  '^'-^  "^-^  "-»'  •"- 

A  lK«.k  might  l,e  filled  with  similar  examples  nf  small  l-.al 

tra.ic  .liskKa.ions.      More  important,  however,  are  the  larger 

'.^"fV'-'v.  Ocfolifr  8.  1914,  ,,  588 
.  ;?'%•  •^P"-'"'*''  24.  1«>14,  p.  SOX 

/'■.rf.  January  I  1918,',,.  I     ' 
,  A'j-  -'"'"»r.v  10.  Vi\H.  u    II.) 
fbid.,  January  10,  I<i|M,  ,,    J.'.i ' 


!»0 


INFLLENCE   OF    THE   GREAT    WAR    UI'ON    SHIPPING 


movements.  Aniony;  these,  three  are  particularly  conspicuous: 
(  1  )  the  decline  in  luiropcan  exports:  (i')  the  corresponding  rise 
in  the  trade  ut  Japan;  and  (:i)  of  the  United  States. 

Decline  of  European  Exports 

The  most  pronounced  characteristic  of  European  trade  has 
been  declining  exports,  and  because  of  loans  abroad,  the  ever- 
increasing  imports,  .\midst  the  general  decline  of  exports  there 
has  been  a  surprising  continuance  of  the  British  export  of  cotton 
manufactures.  An  examination  of  the  economics  of  this  in- 
du.'^try  shows  good  reasons  why  it  should  persist  far  into  the 
struggle.  The  raw  material  takes  up  small  bulk  in  proportion  to 
its  value.  The  finished  product  takes  up  little  space  and  so  long 
as  Britain  can  import  food  or  any  raw  materials,  she  has  abun- 
dant space  going  outwards.  The  cotton  industry,  unlike  iron 
and  steel,  is  one  in  which  women  can  do  the  preponderance  of 
the  work.  We  tind  that  between  l!)l;5  and  1!)1«  i.ntain  actually 
held  and  substantially  increased  her  cotton  cloth  export  (quan- 
tities) to  South  America,  the  United  States,  Egypt,  and  other 
-Mediterranean  countries.  Beyond  Suez  the  competition  of  Japan 
and  the  pinch  of  high  prices  on  poor  purchasers,  made  themselves 
manifest  by  a  decline  of  one-third  (a  billion  yards)  to  the  British 
Indies :  that  to  China  fell  from  570,000.000  to  3T0.000.000  yards; 
to  Japan  from  .50,000,000  to  16,000,000;  with  a  one-fifth  decline 
m  the  Dutch  East  Indies. 


Japan  Gains  in  Trade 

To  date  Japan  has  kept  out  of  the  Allies'  ship  pool  that  her 
ships  may  serve  herself.  Strenuously  has  she  striven  in  trade 
bargains  to  get  heavy  supplies  of  raw  material,  particularlv  steel 
to  build  ships  for  herself.  So  diligently  has  she  manufactured 
that  her  imports  of  raw  material,  especially  cotton  and  steel,  have 
exceeded  all  precedent,  and  the  busyness  of  the  western  world 
has  given  her  a  chance  to  establish  manv  a  trade  which  she  will 
strive  to  hold.     Her  cotton  blankets  are  gladiv  taken  bv  South 


TRADE    DISLOCATIONS    DUE    TO    WAR  {>1 

Africa  and  Australia,  and  hosiery  which  she  has  previously  sent 
only  to  Asia,  is  now  sent  to  Australia.  South  Africa,  and  even  to 
Holland  and  Hngland.'  A  measure  of  these  trade  gains  is  a 
fivefold  increase  of  Japanese  cottons  to  New  Zealand  l)etwcen 
H»14  and  ll»ir.,  while  the  more  important  supply  from  the  mother 
country  had  less  than  doubled  in  value.' 

In  the  Foochow  district  of  China  '  where  the  British  had  a 
monopoly  on  piece  jjoods  trade  l)efore  the  war,  the  Japanese  had 
in  three  years  with  diligent  .vork,  succeeded  in  getting  To  per 
cent  of  it. 

Japanese  cotton  spinning  was  the  most  prosperous  industry  of 
the  Empire  in  l!»ir,  paying  alxjut  (10  per  cent  dividends  and  being 
slightly  ahead  of  the  manufactures  of  chemicals.*  Hong  Kong, 
long  a  heavy  tlour  importer  from  the  fnited  States,  is  experi- 
encmg  a  change  of  diet  because  it  is  now  being  supplied  with 
Japanese  tlour  made  of  Manchurian  wheat  and  brought  down  the 
coast  in  Japanese  steamers.'  The  Japanese  newspapers  announce 
that  this  change  has  come  to  stay. 

More  interesting  and  more  suggestive  is  the  wav  Japan  has 
seized  the  Austrian  trade  in  pencils,  by  supplving  us  ;J  to  5  per 
cent  of  our  import  in  1!)1U,  and  50  to  GO  per  cent  in  lOlT;  and 
the  German  trade  in  toys,  of  which  the  oriental  copvist  supplied 
00  per  cent  of  our  I'.tl"  imports  of  nearly  $2,000,000. 

The  shortage  of  British  steamers  in  Eastern  seas  is  resulting 
m  an  increasing  service  by  Japanese  steamers  in  the  Indian  coast 
trade,  as  well  as  an  increa-ed  Japanese  share  in  the  trade  itself* 

The  figures  of  Japanese  trade,  imports  and  exports,  from  1913 
to  l!»ir.  are  startling,  even  when  allowance  is  made   for  the 
r.5-  in  prices.     The  shrinkage  in  her  imports  of  manufactures 
coupled  with  enormous  increases  of  raw  and  partlv  manufactured 
goods,  and  the  decline  in  food  imports,  show  she  is  developing 

=  Vl  f-  f oinmccfr  Reports.  October  17,  1917.  n    '26 
.  ii"'!-  Pc'"'"'-  -'5.  1917.  p.  341 
thid..  Novcmhcr  <*.  1<;I7. 

j  Report  of  Consul  General  Scidmore,  Oflirial  Bulletin,  January  31.  1918. 


p.  1 


.'  V-  .5-  Cnwmcrcc  Reforls.  Xovenil.er  5,  1917   n   487 
'Fairflay.  December  28.  1916.  p.  10)2.  ^' 


!»2 


INFLlKNCi;    OK    THE    CREA T    WAK    II'ON    SIIll'I'INC, 


lier  CDlmiial  empire  for  food  and  capturinj^'  forei};n  markets  with 
litT  manufactures,  which  show  in  1!»17  more  tlian  threefold  the 
figures  »{  V.n.i.  During  this  period  her  total  exports  sharing  the 
conditions  of  the  L'nited  States  have  ^'one  from  $;]0(t,0(M»,0(M» 
to  $«>oo,0()tl,(MH». 


TRADL  CHANGES— INCREASED  I-OKEKIN  TKAUK  OI-  JAl'AX 


Kooils.  beverages. 

tobacco 

L'rimaimf'd  . . 

Prepareil    . . . 

Raw  materials  . . . 

Partly  iiiamif'd  , . 

Wbolly  maiuitM  . 

Miscellaneous   . . . 


I9U 


iMI'dRTS 

1914 


1915 


1916 


1917 


*  .8.61,1000$  >3.>)H1,00()$  9,074,000$  7,.ns,000$  10,112,000 
2\Amm  1.?,J71,(KVJ  9.(J40.000  S.M,2.m)  8,i5SOOO 
176,.'41,000  16J,877.0(K)  169,4()8.(K)0  215.304.000  JH1.45s'.000 
0J.27J.000  47.982,000  49,041,000  100,478,000  160,77O.(»()O 
01,828,000  43,494,000  25,659,000  42,J7J,000  51,688  000 
2,109,000       2.369.000       2,3(H,()00       3,247,000       4,060,0*K) 


Total   $363,622,000  $296,974,000  $265,426,000  $377,079,000  $516,343,000 


Foods,  beverages, 
tobacco 

Unmamif'd  . 

Prepared  .    . 
Raw  materials  . . 
Partly  manuf'd 
Wholly  niamil'd 
Miscellaneous   . . 


1913 


$  12.290.000! 

18,688.000 

25.593.000 

163,540,000 

92,180.000 

2.980.000 


EXP()!<TS 

1914 


1915 


I9I6 


1917 


13.013,000$  18,661,000$  23,597,000$  36,639,000 
18,653,000     21,277,(K)()     28.524.000     49,197,(KX) 


22.678.(M)0 

152,720.0a) 

83.693,000 

3.907,000 


22.643.0(JO 

161.216.000 

21.069,0(J0 

8.225.0OO 


29.418.(KK) 
269,6.i  1,000 
189,791,000 

21,062,000 


40,620,000 
361,700,000 
293,195,(KX) 

17,747,000 


Total   $315,271,000  $2<M.664.000  $353,091,000  $562,043,000  $799,098,000 

American  Trade 

Since  ll'U  the  United  States  has  found  herself  to  be  what 

England   has   often  called   herself   during   the   past   century 

namely,  the  workshop  of  the  world.  In  the  first  months  of 'the 
war,  steamships  and  cables  could  not  work  fast  enough  at  placing 
contracts  for  guns  and  shellr,  motor  trucks,  barbed  wire,  and 
explosives  in  the  United  States.  Then  came  the  rush  on  our 
shipyards  with  ships  for  European  owners.  Then  the  demand 
for  food,  of  which  we  shipped  enough  for  the  complete  rationing 
of  10,;j  14,000  men  on  the  average  for  the  whole  period.  July  1, 

'U.  S.  C'i';;/w<-)v,-  /iJr/'ijr/j,  February  I'a  1918,  p.  665. 


TRADE    DISLOCATIONS    DUE    TO    WAR 


»3 


lf>l 4.  to  January  1.  1918,  ami  in  addition  enough  protein  to  feed 
2i',<t(M).0(Mt  men. 

The  trade  balance  of  the  United  States  during  this  period  has 
attained  a  condition  never  Iwfore  witnessed  in  the  histr>ry  of  the 
world's  trade,  and  we  may  hope  never  again  to  he  duplicated,  for 
it  is  the  sign  of  woe.  Before  we  entered  the  war.  Kurope  was 
supplying  itself  and  feeding  itself  not  by  trade,  but  in  promises 
to  trade,  namely,  bonds,  which  are  promises  to  send  money 
(really  gofxls)  at  some  future  time.  Then  when  the  borrowing 
capacity  of  the  nations  dealing  with  .American  individuals  was 
about  exhausted,  we  entered  the  war,  floated  our  own  loans,  and. 
as  a  government,  advanced  the  money  to  Europe  (more  than 
$2,0oo,0(»0,()00  in  the  first  six  months'of  the  war)  thus  permit- 
ting a  continuation  of  this  astonishingly  unbalanced  trade,  as 
evidenced  by  our  t(Jtal  exports  during  the  calendar  vear  1U17  of 
$(l,200,()()0.()00.  and  total  imports  of  less  than  $:3.o6o.OOO,000. 


U.  S.  TR.ADE  B.XL.AXCE.  1917.  CALENDAR 


(l.v  Millions  of  Dollars) 


Europe  

'^sia 7S8.2 

Africa 7.rO 

Oceania    99.2 

N.  .America 871.9 

S.  America  598.8 


Imports   Exports 
55 1.1     4.054.3 


U.  K.  . 

France 

Italy    .. 

Russia  in  Europe. 


280.0 
98.6 
36.4 
12.3 


Netherlands    22.7 


431.1 

51.4 

117.1 

U64.6 

312.4 

2,001.0 

940.8 

4190 

314.6 

90.5 


Sweden    18.0 

Norway    6.2 

Canada  413.6 

Argentina     178.2 


Imports   Exports 


Brazil 

Chile   

China    

Japan    

Australia  &  .\.  Z. 


145.2 
142.5 
125.1 
253.6 
32.0 


20.9 

62.8 

829.9 

107.6 

66.2 

57.4 

40.2 

186.3 

76.9 


Total  2,952.4     6231.2 


The  figure-s  to  Europe  as  a  whole,  $4,000,000,000  exports,  and 
less  than  one-seventh  as  much  imports  from  Europe,  are  indeed 
startling.  The  examination  of  the  figures  with  the  principal 
belligerents.  Britain.  France,  Italy  and  Russia,  shows  how  our 
trade  consists  virtually  of  a  hand-out  of  goods  without  return  in 
kind  at  the  time. 

The  trade  with  Canada,  equally  at  war.  partakes  of  the  nature 
of  the  European  combatants,  while  from  South  America  -iid  Asia 


04  INKLIKXCK   OF    TTCE   GREAT    WAR    IPON    SHIPPING 

\vf  art-  Kcttiiif,'  a  surplus  of  imports  to  partially,  but  only  to  a 
very  siuall  (It'Kree,  scpiare  the  account.  ' 

(.omparison  of  l!»I(l  with  liMT  shows  that  these  tendencies  of 
enormous  export  of  American  produce  were  steadily  increasing, 
at  least  on  the  value  basis.  The  (Inures  of  import  Of  raw  ma- 
terials Rive  a  good  measure  of  thv.-  manufacturing  effort  that  the 
liiited  States  is  making  Right  down  the  column  are  heavy  in- 
creases in  hides,  rubljer,  wool,  oil,  and  cspecia!l\  in  the  more 
valuable  ores  where  the  jump  in  manganese  of  more  than  100 
per  cent  in  the  three  years  of  the  war  shows  how  our  steel  in- 
dustry has  been  called  upon  for  high-grade  products.  In  the 
bulky  iron  ore,  ordinarily  secured  largely  from  Europe,  we  see 
a  heavy  decline  (a  million  tons)  which  we  can  fortunately  replace 
at  home. 

U.  S.  IMPORTS  CRUDE.  1914-1917,  FISCAL  ' 

Quantity  (000  omitted)         Value  (000  omitted) 
„..  '914  1917  1014  1917 

^^.:^:;J^^ufac.u.ed;ibs::  3Z   S        ^^^    ^ 

Cotton,  raw,  lbs U3.346  147.061  Ulsi  io'ij^ 

Ilaxs.ed,  bu. 8,653  12,393  10  571  25  149 

.Wal  oils.  Kal 77.3.052  1,034,590  :776  14109 

Leaf  tobacco,  lbs 60,107  46,136  35  029  's48I 

Iron  on-,  tons   2.167  1.149  3986  6Q84 

Manganese,  tons  288,706  eSeioSS  LgSl  10,545 

Total  value  foi  1914.  $632,865,860:  1917,  $1,109,655,040 

In  addition  to  l)ecoming  the  workshop  of  the  world,  the  United 
States  has  also  been  called  on  to  return  two  decades  in  its  indus- 
trial history  and  l)ecome  the  provisioner  of  the  world.  Despite 
the  tact  that  our  export  of  foods  has  been  rapidlv  declining  for 
twenty  years  and  had  in  some  lines  approached'  the  vanishing 
pomt.  we  suddenly  found  our.selves  the  onlv  nation  in  a  position 
to  send  food.  W,th  exports  of  fresh  beef  and  veal  that  had  de- 
cimal to  .l.ooo.ooo  pounds  in  11)14.  and  which  were  returned 
twentytold  m  miports  from  the  .\rgentine,  Uruguay,  Australia. 
'  Official  Hulli-tin,  October  24.  1917. 


R.tDE    DISLOCATIONS    DIE    TO    WAR 


or> 


N'f.v  Zcalan.i.  and  Canada,  we  suddenly  increased  it  t..  170- 
ooo.iMMi  pounds  in  l!»i:.,  -.Jl.tMio.dcM)  in  i!»i.;.  and  21.-),0(io.ooo 
in  I  !i  1 7  ( calendar ) .  Mean-.vhile  the  bacon  and  ham  exports  had 
jumped  from  ;!:.o.(mi    ooo  pounds  to  over  nOO.(M)().()oo. 

Oil-  wheat  export  which  averaged  M.OOO.OOO  bushels  in  three 
prewar  years,  went  up  to  i5!».()0<».o(tO  i„  loi.-,,  i7;i,()oo,()0()  in 
1!»1<;,  and.  alas,  down  to  l()t;.0()(),o--  i„  un:  (calendar) 
Butter,  in  which  we  liad  been  an  in  iuspicuous  figure  with 
4.0()0.(»oo  pounds  export  for  three  years  before  the  war.  went  up 
to  L>(;.0(»(),()(Mt;  cheese  from  ;t  7(M),<()0  t-  (Jti.ooo.ooo;  conden<=-d 
milk  from  17.000.000  to  -'.■i!t.OOo.,HlO  p„i,„ds.  and"  as  is  well 
known  the  call  for  food  is  becoming  ever  louder. 

We  have,  however,  recouped  ourselves  to  some  extent,  and 
with  our  war  prosperity,  kept  up  the  tlavor  of  .^ur  eating  bv 
mamtaming  our  imports  of  coffee,  teas,  and  spices,  and  substan- 
tially increased  our  imports  of  cocoanuts  and  crude  cocoa  (179.- 
000.000  pounds  In  1!>M,  .•J«7,000.000  in  1!>17). 

The  decline  in  the  imports  of  some  luxuries  is  a  measure  alike 
of  European  inability  to  produce,  and.  since  v  e  have  got  into  the 
war  bond  buying  business,  of  our  own  inabilitv  to  buy  this  kind 
of  entirely  non-essential  commodit.es;  for  example,  our  consul 
general  at  Paris  reports  for  the  first  nine  months  of  1917  •  the 
falling  off  of  exports  to  this  coumrv  through  Paris  from  $4-'  - 
000.000  to  $:J.5,000.'.00.  decreases  being  chiefly  precious  stones 
pearls,  s  Ik  manufactures,  champagne,  feathers,  cotton  manu- 
factures 

Similar  .  durir-  the  year  1!>17  the  consul  at  St.  Gall.  Switzer- 
land, says  that  the  small  shipments  of  cotton  embroideries  and 
laces  are  responsible  for  a  decline  in  trade  from  $7,500,000  to 
less  than  $4,000,000.= 

The  ivory  and  ostrich  feather  market  of  Lo  a  had  reached 
an  unprosperous  condition  as  early  as  the  middle  of  191G.^ 

!V!-.?-  C'oinmcrcc  Reports.  October  U,  1917.  D.  177 
■  Ibid..  February  8.  1918,  p.  S16. 
Fair  flay.  December  21.  1916.  p.  955. 


96 


INFLL-KXCK   Ol     TI[F.   HRF.A T    WAR    II'ON    SIIWPING 


Military  Domination  ok  Kconomic  I.,fe 

The  .vcar  l!»ls.  pranted  a  continuance  of  the  war  in  full  vig.ir, 
will  show  more  chauRcs  than  any  single  year  during  the  war.  for 
the  reason  that  the  who?^  basis  of  trade  i:  changed.  Normal 
trade  is  controlled  by  competition  and  the  desire  for  «ain.  TMs  is 
now  eliminated.  Xow  all  governments  are  controlling  u)ni- 
mercc  with  ever  increas'ing  disregard  of  indiviihial  preferences 
and  profits  as  national  need,  ship  shortage,  and  war  stress  make 
need  rise  higher  and  higher,  thus  pushing  national  control  to 
severities  previously  undreamed. 

(Jovernnient  regulation  of  trade  has  been  the  bugbear  of  Anglo- 
Sa.\ons  in  the  recent  decades  oi  peace,  but  now  it  has  become  a 
Cyclops  in  this  time  of  uar,  holding  trade  in  an  all  inclusive  and 
entirely  relentless  grip.  As  the  government  conscripts  the  sol- 
diers, so  it  conscripts  tra.le  in  the  dual  attempt  to  prevent  trading 
with  the  enemy  and.  with  lessened  resources,  to  produce  increase 
of  economic  etificiency  at  home,  in  Allied  lands,  and  on  the  battle 
front. 


Trading  with  the  Enemy 

Human  nature  is  much  too  weak  to  resist  the  temptation  of 
war  profits  even  by  selling  to  the  enemy,  and  governments  have 
ample  provocation  for  ail  the  restrictions  they  have  taken.  Some- 
times the  trader  had  some  excuse.  Sometii.ies  he  had  none. 
Thus,  the  Scandinavian  market  has  lieen  partly  supplied  with  Ger- 
man goods  and  the  American  and  British  trader  could  properly 
won<Ier  it  the  great  increases  of  Scandinavian  trade  were  not  re- 
placing (jerman  supplies  for  Scamlinavia  rather  than  going  on  to 
Germnny.  There  was,  however,  no  question  about  the  results  of 
the  reported  export  of  coal  at  $40  a  ton  from  \ew  York  to 
supply  German  cruisers  that  were  destroying  American  and 
Britisli  trade  in  the  South  Atlantic  in  the  early  part  of  the  war.' 
Even  clearer  is  the  example  of  the  German  firms  in  Chile  and 
'  Fairflay.  October  22.  1914,  p.  642. 


TRAriK    DISI.fK   \T|()\?-    rilK    TO    WAR 


07 


ArjTcntina  who,  with  «<)otl  pnilit  to  themselves.  c«>n«ii(;ned  to 
America  carRoo  of  hides  anil  nitrate  to  Ik  made  into  the  war 
supplies  for  wliich  in  the  early  years  of  the  war  Germany  so 
bitterly  denounced  America. 


Tlu-  Hrilixit  Hlockadc 

r.njjland  early  commenccil  the  dual  jiolicy  of  controIIinK  her 
trade  h>  >trenRthen  hers. If  and  weaken  lur  enemies  by  blockade. 
Within  two  weeks  after  the  war  started,  she  prohibited  the 
export  of  practically  all  kinds  of  foods  and  began  her  policy  of 
holdinf;  up  cargoes  Ixiund  to  (iennany  or  .  ,  neutral  countries 
ailjacent  to  (Jermany.  Thus  ships  to  the  Meiliterranean  were 
searched  at  (iibraltar  for  contral)and,  and  a  two  weeks  delay  for 
an  .\nicrican  steamer  while  hundreiU  of  tons  of  copper  were 
I)eing  taken  from  her  was  a  c(  ninujn  occurrence.'  The  list  of 
contraband  articles  was  co  istantly  being  changetl  as  the  economic 
concept  of  the  war  grew.  Control  of  neutral  trade  was  also  in- 
fluenced to  a  considerable  e.xtent  by  the  fear  of  too  great  resent- 
ment in  forei'-,n  countries.  Thus  for  a  time  the  cotton  blockade 
helfjcd  to  cause  such  low  prices  of  cotton  and  such  industrial 
depression  that  our  whole  South  was,  generally  speaking,  resent- 
ful toward  the  Allies.  For  this  reason  and  for  the  lack  of  full 
appreciation  of  the  war  >alue  of  cotton,  Britain  permitted  it  to 
go  to  Germany  for  a  time  early  in  V.)ir,  when  more  tnan  a 
(juarter  of  a  million  bales  wt  e  sent  from  this  country  dii  :t  to 
Germany.-  If  the  (Jermans  had  been  in  the  English  position, 
they  would  have  bought  that  cotton  and  stored  it— in  Bucking- 
ham Palace  if  necessary. 

Despite  Britain's  complete  supremacy  of  the  sea,  the  interna- 
tional (litlficulties  and  the  international  law  with  regard  to  what 
was  contraband  caused  her  blockarle  policy  to  be  quite  ineffective 
because  (jf  the  large  amounts  of  trade  that  went  through  neu- 

I  ['.  S.  Canstilar  licports.  October  2b.  1914,  p.  IJK). 
.Another  iiritish  decision,  since  proKililv  repented,  'v.is  ihe  refMs.il  to  biiv 
t'hPnnrlh,'   "'"'• /''o'"   ticrmany    for   fear   of   streu^nhening   Germanv.   and 
the  purcha>c  by  the  government  of  distant  supplies  instead. 


!»8 


IXrHENCE    OK    Till,    r.REAT    WAR    II'CIN    <||||-|'IN<J 


iral^.     Mr.  ,lc  T.inkervillc.  editor  of  the  XaulUal  (;<;--.•//.•.  vrit- 
iiiR  in  June,  1!M7,  sa>»: 

It  is  no  >firfi  iinw  that  the  fontulations  ..f  many  a  tur- 
tiiiic  in  the  iifw  ira  ..t  >hippin>,'  were  made  carrvinKiari;ucs 
tu  p<,rts  ni  ftalv.  Spam.  l-..rtu;;al.  llollaiul.  Swclfii.  and 
Norway,  which  eventually  iduml  their  way  to  (;ennaii>.' 

The  resentment  ui  the  American  people  at  having  their  tra.le 
stopped  and  the  pr.itests  ,.f  the  American  Ji..vcrnment  on  this 
Mil.ject  caused  so  much  ni.,re  tavoral)lc  treatment  fc.r  -ntr  vessels, 
that  they  were  at  a  premium. 

American  ships  were  favored  hv  untlerwriters  in  the 
matter  ..f  insurance  against  the  risk  of  detentiuti  and  cap- 
ture and  .\iKerican  ships  were  ahle  to  command  l)etter  rates 
in  the  charter  market.  Soun  merchants  cnKaKcd  in  this 
lucrative  trathc  Iwjjan  to  scour  American  ports  for  coasting 
steamers  able  to  undertake  voyages  across  the  .\tlantic.  and 
thus  tor  the  hrst  time  in  a  Reneration  the  .\merican  tlag  was 
restored  to  a  conspicuous  position  on  the  transatlantic  sea 
route.' 

Some  measure  of  Britain's  failure  early  in  the  war  to  check 
trade  to  (iermany  was  shown  by  the  enormous  increase  of  trade 
to  Genoa  in  the  winter  of  1!)14  and  l!il.-,,  when  for  a  time 
the  port  jrot  so  full  of  steamers  that  sixteen  of  them  were 
lyip '  in  nearby  ports  wnitinp  to  discharKC  cargoes  of  grain,  ni- 
trate, etc..  a  large  part  of  which  got  to  (Iermany.' 

The   increase  of   trade  through   the   northern   neutrals   was 
astonishing: 

Before  the  war  the  fnited  States  exported  onlv  negligible 
quantities  ot  aluminum  to  (iermanv  and  the  six  neutrals 
In   1!»1L'  we  sent  .l!:..7(»l»  worth  to  the  six  neutrals      But 
I'-.  1!»1..  we  sent  more  than  $411,0(10  worth  to  .Vorwav  and 


Sweden  alone. 

Neither  the  Xetherlands  nor  anv 


other  of  the  northern 


I  AVti'  )-,irl,-  llri-iimi,  Post.  Juiit  .50.  l')i; 
•  r;,,l'/  rankfrvillc.  .\.-t..  J  ,.r*  /{irn.Hi;  Post.  June  i(\.  1917. 
/•o'l/'/ay,  Jaiuiary  1.  1915,  p.  103;  Novcmlier  U,  1914   p   746 


TRADE    DI8LOCATIOMH    DUE   TO    WA«  09 

nrutral*  liM.k  any  special  quantity  of  Iwa**  frtmi  u«  prior  to 
the  war.  They  all  devclopeil  an  interest  in  our  l>ra»*.  how 
ever,  jiwt  aUnu  the  same  time  that  it  IwRan  t.i  Ik  very 
impi.rtant  for  (Jermany  to  secure  additional  supplies  of  it. 
Denmark,  which  had  Iwen  inifM.rting  less  than  *20,(XX>  worth 
annually,  mcreased  her  purchases  to  $14;J.0(K).  Norway 
jumped  from  «3.«45  in  1U12  to  »lH:j.a21  in  H»l«.» 

Holland  had  l)een  Imying  about  ♦^.'..OOO.OOO  worth  of  copper  a 
year  from  the  United  States.  largely  for  industrial  Germany  up 
the  Rhine,  but  Knglaml  siwn  cut  that  to  $-».()()0.()0<).  althouKh 
there  was  a  great  increase  in  Sweden's  copper  trade  during  HM.i 
and  l!»lil. 

Tinplate  to  the  si.x  neutrals  went  up  from  less  than  400.000 
pounds  in  1SU2,  to  y.OOO.OOO  pounds  in  lUlU.  By  every  possible 
means  Germany  increased  her  stocks  of  materials,  even  Iwfore 
the  British  blockade  had  begun.  They  took  a  census  of  copper 
throughout  the  Empire,  which  listed  the  roof  of  the  Reichstag 
building,  and  the  cooking  pots  in  the  Emperor's  kitchens,  and 
then  scraped  and  smuggled  to  save  His  Majesty's  culinary  outfit. 

Food  also  apparently  went  to  Germany  by  the  roundabout  way. 

Before  the  war  Germany  bought  annually  considerable 
quantities  of  American  rice  and  Norway  none.  Since  the 
outbreak  of  the  war  Norway  has  bought  practically  what 
Germany  used  to  take,  and  Germany  has  had  none.' 

In  the  same  way  dried  fruits  to  the  northern  neutrals  have  in- 
creased in  amounts  just  al)out  equal  to  that  tiken  by  Germany 
before  the  war.  Vegetable  oil,  went  up  four  or  fivefold,  bacon 
from  l.'),0(»0,000  pounds  to  «0,000.000  pounds,  and  sole  leather 
from  L'OO.OOO  pounds  in  1!»1l'  tu  12.000.000  pounds  in  1910.  It 
is  little  wonder  that  the  English  and  French  said  bitter  things 
about  the  Americm  profiteers. 

England  attempted  to  stop  this  trade  so  far  as  she  could  by 
niakinjr  her  famous  black  list  of  firms  with  which  English  sub- 

'  O.  K.  Davi>.  March,  1917. 


ItHI 


INKI.IKNfK    or    IllK    liHK.Xr    WAB    IfHlN    !lHI|»p|\,j 


jtcl<  o.iilil  it.>t  fra.lf  kiaii^c  the  firm*  were  mure  or  le»,  (ierman. 
If'l  f-erniaii  va|iii.tl.  .-r  were  ai'litiR  «.erniafi\.  Po  the  vijjorou* 
Anterican  pr.-UM  comermiiK  thi,  action,  the  llriii^h  answer  wa* 
-otinil.  Ihi*  lhe>  *ai<l  wa.  no  attempt  to  mtluence  American 
tra.le,  It  «a>  merely  an  order  to  I'.nnli,!.  citi«n»  a»  to  with 
whom  tlie>  »houl(l  or  «.hoii|i|  not  do  lnisine»». 

KitHuimj  Ihc  British  Hinkade 

When  cotton  reached  *»  a  [K.tind  in  (a-rmany,  January.  11)10. 
ami  ^nme  other  conmiodities  uere  of  e<nial  value,  we  can  see  an 
explanation  for  the  ureal  inKenuity  of  parcel  |)o.Ht  traders  who 
Ncnt  packa>;e^  seeming  to  he  newspa[>cr.  Init  which  were  hollowed 
out  with  a  cavity  in  ihe  middle  for  hi<lden  freijjht.     forruKate.l 
wrapping  pa|)er<.  often  had  in  each  corruRation  a  tinv  strand  ..f 
o  p|K-r  w  ire.  or  a  tiny  filament  of  rnhkr,     M.K.k*  were  hollowcil 
out  and  turned  int..  little  trunks.      One  of  the  moM  iuKenious 
cases,  ami  one  which  illustrates  the  ditViculties  of  hlockade  ami 
the  straits  of  (.ermany  for  a  valued  pnxluct.  is  the  followinij: 
I'rom  an    \meric.-n  |K.rt  parcels  were  sent  l.y  post  to  a  (  hina- 
man  at  SIiatiKliai  who  rewrappe.l  and  sent  them  to  a  t  hiiiamau 
near  .Sinyaf.ore.     I U-  rcwrapiK-d  and  sent  them  to  another  China- 
man  near  l{.,ml.ay.    This  man  in  turn  forwarded  them  to  Persia, 
and  they  weiu  'hrouRh  Mritish  parcel  post,  despite  the  fact  that 
they  containeo     product  imported  liy  Persia,     l-inal  transference 
from   Persia  overland  to  the  Turks  and  thence  to   Merlit;  was 
simple. 


The  War  Chauf,rs  Cnitcd  Shihs  Policy  i„  Industry  aiui  Trade 

W  hen  the  Inited  States  entered  the  war,  the  prohlem  of  trade 
control  was  sinipliiied  for  Britain,  hut  \cry  much  complicate.!  for 
the  neutrals.  Instead  of  otVicially  ijmtcctin-  American  exports 
that  werelM.und  eventually  for  (iermany  via  Holland.  Denmark. 
N'orway.  .Sweden,  or  Spain  we  n.,w  hccame  really  interested  in 
destinations. 

It  was  hifjh  time,  for  in  the  months  preceding  our  entrance 


TIIAI»K    rtlMUH'ATIONM    Ml  K    TO    W  \M 


|0| 


int..  il)«  war  we  had  «tra*lil.v  -.frmuJlHrnc.l  <;rrnian>  ihr-.tiRh  ihf 
•  »il-ciikf  and  tht  i-i.ttDnsrcil  ntral  ihat  were  »rnf  Ik  ihc  Dutih  and 
Scandmavtan  t,  s.  and  aUi  ihriiii>;h  »h»*  \rKctalilc  ..d.  Uc.ii. 
Kfaiii.  nii'taU.  lutt.in  that  wmi  «■.  thcM-  m.rthcrii  iiciiiraN 

Whrii  \vr  entered  the  j^roup  of  trade  iimtroniiiK  natiutiH.  we 
|hi>*ed  a  trading  with  the  eneniv  ait  and  started  ..n  a  »ta|{e  ..t 
rapid  ev-hiiiun,  and.  a^  with  the  omniript  ;irmy  atid  ..ther  war 
inatiern.  we  re|)eated  the  Mep^  that  had  Ue!i  taken  hy  the  nati-.n* 
Ih.il  had  iH-en  earhtr  pren^e-l  h\  the  war.  Ihe  trade  rentriction* 
»i  the  war  in  their  Mniple  chmnicleH  would  till  volumes.  Only 
their  general  tendencies  can  lie  mentioned  here. 

F-arl>  III  the  war  Mritain  wa*  suchlenly  calle«l  UfMin  to  pr.«hice 
munitions  in  .jiiantities  liefore  nniniaKine.l.  She  had  to  take  con- 
trol of  the  output  of  the  cruder  iron  and  steel  industries.  thuA 
Kuaranteeinj:  that  the  war  itKhistrie*  not  their  raw  material.  To 
concentrate  lalxir  nn  csienttals,  new  huildinRH  could  only  lie  huilt 
with  sjiecial  iiermission.  which  idess  it  wax  a  war  enterprise  was 
universally  rcfuse«l,  except  for  stnxturcs  costing  less  than  £,'.oo. 
so  that  hy  HMT  houses  were  very  scarce  in  manv  jwrts  of 
llnKJand. 

Before  the  war  wa.s  two  years  old,  F-:n(i;lish  industries  and 
consumption  were  l)eKinnin>;  to  feel  the  shortage  of  imports,  of 
which  alM)Ut  one-lifth  (12  to  1.')  million  tons)  were  cla.ssed  as 
non-essentials  that  could  lie  spare<l.'  The  editor  of  /•nirpUtv 
tstimatcd  in  the  sprin^jof  l!»lti  that  prohihitions  or  semi-prohihi- 
tions  nf  the  Kovernment  had  alreatly  st.ip|)ed  alxait  one-third  of 
this.  leavinR  !».(MM>.0()<)  more  tons  which  could  Iw  <lis|>cnsed  with 
in  the  interests  r)f  the  national  service.  Sixteen  months  later,  in 
tilt  autumn  <.f  I'.tlT.  a  new  definition  of  dispensable  an<I  indisjwn- 
sahlc  had  licen  adopted.  f,)r  the  British  Government  officials  ad- 
mitted that  the  normal  British  imports  of  «0,00().0()(l  tons  f.ir 
civilian  use  had  shrunk  to  2."..<>oo.ooO  tons  and  still  the  siilmiarine 
was  sinking  ships  much  faster  than  they  were  heinn  huilt.  This 
makes  it  clear  why  the  British  (iovernmcnt  ordered  the  endinff 
of  the  cntre[>.>t  trade  t..  France;  why  in  the  early  months  of  IDIM 

'  riiirf<lay.  Way  11.  M(,.  p   730. 


102      ixri.rKMi'K  oi'  Tiir  n»r.AT  w a«  ri^tx  ^nn'riNa 

l\\t  Uritifih  CDiiiiti  mitU  ticKan  to  >«  |Nirtly  mirm|it<>yr<l,  why 
l',tiMI»cati  jiiililni«t«  l)f|{an  to  MiKKfot.  Manh,  P'|>«,  thai  |>crha|>* 
i-iuriific  hail  licticr  have  i<mm|  rather  than  w>l«lirr<«  from  Aitirrtca. 
anil  »\h>  the  l'nitc«l  Siatct  and  l.tiKlaml  cummamlrcrctl.  (  March, 
ItM**)  a  milhon  ton*  >>t  Dutch  !thi|)|>in|;. 


Cot't'rnuu-nt  Control  in  Imlujlry 

The  jirenturc  of  the>c  cser  hanirnini;  nrce«iitifH  ha«  caunetl  an 
aln'."»i  intinitc  nnmticr  of  cscrcisei  <>i  natiimal  cnnlml  of  imp  '*. 
export*,  ami  induHtrie^  With  the  <lechntnn  <.ii|n>ly  of  shipi 
the  Mriif.h  (invernnicnt  found  that  they  could  not  have  trade  t.. 
the  free  urrani^ement  !>>  individuals,  for  the  reason  that  luxuries 
could  outhiil  the  neceotitie*  an«l  Ktt  the  shi|»».  A  ?tmaH  increaie 
of  |HTcent.ine  of  value  on  lux'irie«  wouM  nial.  a  tremcmlouH 
freight  |»o<i*il)le.  whereas  anythint;  like  the  >.anu-  .unount  of  in- 
creajw  on  necetoitieo  would  make  an  unixi-Mlilt  price.  So,  to 
prevent  luxuries  outliiddini;  nece!i»itie!i.  and  the  eci>nomic  wel- 
fare of  the  nation  from  sutferinK.  the  government  .ictinjj  under 
orders  in  council  under  the  Defense  of  the  Uealni  Act,  made  one 
commission  after  another  to  control  irti|>orts.  Ihey  lieRan  with 
sunar,  then  wheat,  then  corn,  oats,  oil-cake,  until  the  whole  cereal 
group  was  under  control.  This  of  course  t'Mik  aw,iy  the  iHisincs* 
of  impjirters  who  had  lieen  handling  these  pmkIs.  Init  the  Rov- 
ernment  virtually  re<|uisitioned  the  im|<ortinj,'  tirtn  to  do  Inisiness 
for  the  government.  Ihey  allowe!  tlie  wheat  im|K)rter,  for 
exam|i!c,  a  s.ntisfactory  sum  for  handling  grain,  cnot  gh  to  allow 
liitii  a  tniHlcratc  pmtit.  .\fter  this  the  miller  was  allowed  to  !niy 
it  on  '.oiKliti-m  that  he  made  a  moderate  set  proti»  m  gri.nl'ng. 
Then,  ilie  IimkI  controller,  if  he  found  hread  selling  it  a  high 
pricf.  could  >tart  right  hack  along  the  line,  see  wh.  hid  i'Con 
protit  graliliiiig  and  stop  him.  and  so.  Iicgimiing  with  goMTunient 
mijiort  and  price  control,  they  kept  unrcasonahlc  profiteering  it 
.1  mitiimnm.  an<l  prices  were  therefore  much  lower  than  in  the 
riiitfd  State-,  and  the  war  was  flicrcforc  less  expensive. 

It  wages  or  other  costs  i>i  business  go  uji  aiitl  >otne  of  the  men 


Tli.^lHt   rtllMtr^TIO!**   IM'K   TO   WA« 


108 


»f«>«j«  ihr  line  iMrtwefti  the  ii»i|i..r|pr  ;in<l  ciHUumrr  are  U^iug 
ni<itit\,  ihc>  f.iri  iiinir  licfori*  ihe  r>>tittiti<«iiii),  pr-ivr  ihcir  raw. 
«imI  Kf»  a  •••»:•>«  ituTca-r  in  iir.iiit.  lUii  the  i'i)n«|iKUi.H»  thing  i« 
ihr  .inall  am-'Hiit  i>f  tht«  that  ha»  ha|HHne«l.  .\l|  Knglaml  ha» 
iieomr  a  uar  nuuhine  \^  liw  wurk  ettlatKol.  it«  ortcani/ation 
»va«  m.i.lf  m-irt  |Krnianiiit  l.y  having  a  Mini-try  nf  .\liumi«>n». 
a  Mininfry  of  I't-xJ  ('..ntrul,  a  Minimry  <.f  Shi|)f>iitR.  etc. 

Nothinj;  «ai  i.ki  larnr.  n^.thinK  tin.  Mnall,  !•»  ci.ni*'  un«ler  »hi'« 
B«ivernmcnt  cntr.-l.  At  one  ciifl  of  the  iron  iiuliiMry  the  Uriliih 
liNik  iMm^eiKimi  of  all  the  iron  oi-r  mine*  in  the  ninntie<i  of 
CiiinlHrluul  and  l.ama^hire.'  and  at  tUv  other  end  the  hriti^h 
War  tMVice  forkide  the  %n\v  or  loan  or  nianiii'.icture  of  a  ho«ier»- 
neeille  ^ithoMt  the  |M-rniiMion  of  itt  ho^ery  committee,' 
i.nf  could  Hell  .ir  rx|»ort  w.M)d-\vorkinj;  M>achinery  withoui  < 
liccn-.e,  and  m>  ,,r\  for  many  jHis-iihlc  fiaK*^*' 

Conlrollinij  Trade  to  .tU  llw  ll'ar 

The  I'niterl  States  promptly  adopted  llie  <..ime  principle.  In 
the  autumn  of  Il>l7  we  prohihited  exjHirt  of  coal  for  a  time 
across  the  Lake*  to  tanada.  ■*«>  that  the  coal  miijht  jjo  instead 
up  the  Lakes  'o  our  own  Northwest.  .\  little  later  on  it  was 
alloweil  to  j;o  to  (.anada  liy  sfwcial  license  for  each  shipment.' 
The  lnite<l  States  ru  'lenly  prohibited  the  e\|).irl  of  sulphur 
to  t  anada  in  Septemk.  until  we  could  investigate  local  supplies 
anil  local  needs  to  see  whether  or  not  we  had  the  sulphur  to  spare. 
Sweden  at  the  hcRinnini,'  of  winter  (  Septenil)«r.  Iltl7)  reipjisi- 
tioiied  all  fiwhler  within  the  kingdom  ami  gave  a  very  long  and 
specific  list  of  artidei  that  were  f<Klder.'  Spain,  hy  royal  order, 
p.ohiliitcd  the  export  of  fresh  olives  in  January,  liMH/ 

I'.xamplcs  of  this  sort  hy  the  score  can  lie  had  from  all  <|uarters 
of  the  world,  even  from  the  neutrals  who  are  not  adjacent  to 
combatants.     I'or  instance.  Cuatcmala  prohibited  the  export  of 

'  OMcial  PhIIi-Uh.  .Aiigmt  2,  1917,  p.  5 
'Ibid..  fktotHT  1.1,  1917,  p,  8. 

•  /''irf.,  (VtotM  t  _>,  1917,  p.  1. 

*  Ihid..  .SrptcmlMT  i<».  I9I7,  p.  4,  * 
'  U    S.  Commcn;-  Kcportt.  January  JI.  1918.  p.  ViZ. 


T^^       iM-i.tTNcr;  OF  tiik  grkat  w  \k  iiniv  sniri-iNr; 

cattle  into  .Mcxicc     This  cxanipk'  has  im  new  i>ritici|)lc  in  it  at 
all.  even  no  ni-u  nicflKxl. 

i'.y  thi-  autumn  oi  I'.MT.  with  the  Unitctl  States  in  the  war  and 
lulpins,'  rather  than  hindering  trade  restrictions,  the  matter  of 
trade  control  hccanie  more  systematized.  The  P.ritish  embargo 
put  exports  into  three  classes: 


a.  Those  prohibited  to  nil  destinations. 

b.  Those   prohibited    to   all   destinations   other    than    l?ritish 

Colonies  .md  protectorates. 
,.    Those  prohibiteil  to  all  destinations  in  I'.urope  and  on  the 
Mediterranean  and  Black  Seas  other  than  .\llied  coun- 
tries and  Spain.' 

.\bout  this  time  France  had  a  million  tons  of  raw  materials 
piled  up  in  the  .\tlantic  p(»rts  of  the  United  States  and  her  muni- 
tion plants  were  running,'  ])art  time,  so  that  lier  trade  restrictions 
took  on  the  more  strenuous  form  of  licensing  every  shipment  of 
import  and  approvinf,'  the  route  of  every  vessel  that  sailed.  She 
also  reduced  her  sailings  l)etween  distant  points  like  Madagascar, 
-Argentina,  .\ew  Orleans,  in  the  interoi  of  more  frequent 
shorter  vo\ages  across  the  \orth  .Atlantic. 

.\fter  the  outbreak  of  the  war  our  Congress  jjroniptlv  placed  in 
the  hands  of  the  President  very  inclusive  powers  for  the  control 
of  commerce.  .\t  the  beginning  of  the  enforcement  of  the  law. 
President  Wilson,  in  a  proclamation,  stated : 

It  is  obviously  the  duty  of  the  United  States  in  liberating 
any  surplus  products  over  and  above  our  own  domestic 
needs  to  consider  first  the  necessities  of  all  the  nations  en- 
gaged in  war  against  the  Centra!  Empires.  .\s  to  neutral 
nations,  however,  we  also  recognize  our  <luty.  ...  In  con- 
sidering the  deficits  of  food  supplies,  the  government  means 
only  to  fulfil  its  olivious  obligation  to  assure  itself  that  neu- 
trals ,ue  huslxinding  their  own  resources  and  that  our  sup- 
plies will  not  become  available,  either  directly  or  indirectiv, 
to  feed  th.c  enemy. 

'  U.  .'^.  Comiiurcc  Reports.  October  23,  1917,  p.  305. 


TRAMK    IHSI.d*  ATIOXS    Ml'K    T(  I    WAR 


io.-> 


By  cM'cutivf  (inlfi-  he  created  an  Mxports  Council  (  Inne  ■22, 
1!»17)  '•  t<i  forninlate  policies  and  make  reconimtndatidii^  neces- 
sary to  carry  out  the  purposes  of  the  law."  This  council  con- 
sisted of  the  Secretaries  of  State.  ARriculture,  C'ummerce.  and 
the  F'ooil  Administration.  ICxecution  of  the  law  was  in  the 
hands  of  the  Secretary  of  Commerce.  The  tirst  license  they 
granted  was  to  Caj)tain  Uaoul  .\mundsen,  for  shipment  of  food 
••  from  the  L'nitcd  States  to  Kaoul  Amundsen,  at  the  North 
I'olf."  Within  a  week  the  Exports  Council  iniblished  a  l.'^t  of 
eighty-seven  articles  of  which  export  was  prohibited. 

Two  months  later.  August  I'l.  the  I'resident  created  an 
Exports  .Administrative  Hoard,  composed  of  representatives  of 
Secretaries  of  State.  Agriculture.  Commerce.  Food  .\dministra- 
tion,  and  the  Shipping  Hoard,  and  gave  them  the  executive 
authority  that  had  previously  heen  vested  in  the  Secretary  of 
Commerce.  .\t  the  same  time  he  added  the  chairman  of  the 
Shipping  Hoard  to  the  r-:xports  Council  and  limited  the  functions 
(jf  that  body  to  advice  upon  such  matters  as  may  i)e  referred  to 
them  by  the  President  or  the  Administrative  Board. 

On  October  1:>  another  change  of  administration  was  made  by 
adding  the  Secretary  of  the  Treasury  to  the  list  of  men  in  charge 
of  the  Administration  of  Exports,  and  the  new  Ixxly  was  called 
the  War  Trade  Board.  Our  list  of  prohibited  exports  rapidly 
grew  until  the  list,  as  published  in  the  OtHcial  Bulletin  for 
October  -'i>.  contained  (Hi  articles  and  classes,  including  wool, 
copper,  tin.  machines,  all  of  which  were  practically  prohibited, 
and  ten  columns  of  articles  which  could  only  be  exported  with 
sjjccial  license  for  each  shipment. 

Xoveml)cr  2S  the  President  issued  a  proclamation  making 
(jperative  the  law  for  the  control  of  imports,  and  we  found  our- 
selves rapidly  approaching  the  position  of  our  European  allies, 
especially,  as  by  midwinter,  we  brushed  all  these  complications 
aside  and  adopted  the  general  policy  of  licensing  all  imports  and 
all  exports.  On  March  -i-l  we  went  a  step  farther.  The  War 
Trade  Hoard  announced  a  List  Xo.  1  of  .^2  classes  of  imports 
which  it  termed  "  least  eshcntials  "  which  will  be  almost  pro- 


lot; 


iM-i.ri;.\i  i;  (ti-   riii:  ckkat  war  ri'oN  shmtixg 


hibitiil  after  April  l.">.     I.icensts  U>  inipurt  will  only  lie  available 

wluii  i:  f.in  lie  >iiii\\ii  tliat  >\y,ii:v  i--  availalili' — a  very  ellective 
litiiitatii>n. 


Tin;  OhFuiAL  MiM)  Rki'i.acks  SrppLV  ani>  Demand 

All  tlle^^e  chaiifjcs  make  a  complete  destructidii  <ii  the  old  basis 
<if  trade  in  which  individual  need,  individual  initiative,  the  law 
of  supply  a'i'!  demand,  guided  by  the  desire  of  j;ain,  iuul  been 
allowed  to  meet  the  nation's  needs,  in  place  of  all  these  titne- 
jjruved  and  time-hunored  adjustments  we  now  have  the  will 
of  an  (  I'ji.'d  saying  who  shall  buy  and  who  shall  not,  and  what 
shall  be  bought  and  what  shall  not  be  bought.  Thus  in  midwinter 
a  shipowner  came  before  the  chartering  committee  of  the  Ship- 
ping Board,  seeking  permission  to  take  a  cargo  of  resin  and 
barbed  wire  to  I'ara,  Hrazil.  it  was  refused,  but  he  could  take 
coal.  He  had  no  alternative,  so  he  took  coal,  which  would  keep 
ice  plants  and  factories  running  in  I'ara,  whereas  resin  would 
merely  make  soap,  and  the  liarbed  wire  would  I)e  a  drain  on  our 
home  industry.  Returning,  the  ship  captain  wished  to  bring  a 
cargo  of  Hrazil  nuts.  He  was  refused.  Statistics  of  the  period 
showed  that  we  had  imported  heavily  of  Brazil  nuts  the  previous 
six  months,  but  the  aeroplane  factories  needed  cedar  logs,  which 
the  captain  was  permitted  to  bring  and  did  bring.  Similarly 
other  men  wished  to  clear  their  ships  to  Africa,  to  Australia,  to 
Brazil.  The  chartering  committee  refused,  but  said  they  could 
go  to  the  west  coast  of  South  America  and  that  they  niust  take 
coal.  They  did  so,  for  the  Shipping  Board  was  the  agency  by 
which  this  government  was  providing  itself  with  nitrate  of  soda, 
for  which  the  war  had  given  us  enormously  increased  demands, 
and  by  -ending  coal  outward  to  the  nitrate  coasts  we  were  guar- 
anteeing that  the  mines  and  railroads  of  those  countries  kept  the 
wheel-  of  basal  industry  turning. 

.Ml  tliis  control  of  the  import  and  export  for  national  purposes 
and  ffir  the  starvation  of  the  Central  Empires  naturally  left  the 
economically  de])endent  neutrals  out  of  account,  and  brought 
vigorously  to  the  fore  the  question  of  international  policy  with 


TRADK    DISLOCATIONS    DIE    TO    WAR 


107 


regard  to  the  neutral.  There  was.  for  example,  tlie  case  of  the 
ri)w  of  loaded  Dutch  steamships  which  lay  anchored  iti  the 
Hudson  at  Xew  York,  hut  each  day  they  were  refused  permission 
to  sail.  For  si.x  long  months  they  lay  there,  at  an  expense  of 
two  or  three  or  five  thousand  dollars  each  per  day,  paying  their 
crews  and  waiting  for  the  permits  that  were  steadily  refused, 
although  rumor  has  it  that  their  owners  were  receiving  pay  for 
the  ships'  time  from  the  German  Government.  Finally,  how- 
ever, the  long  siege  was  broken,  the  cargoes  were  unloaded  and 
sold  for  .American  consumption,  the  \essels  chartered  by  the 
United  States  Government  and  put  in  the  .Suuth  American  trade. 


Nations  as  Bargainers 

.As  the  trade  between  the  United  States  and  many  other  coun- 
tries had  become  for  each  shipment  a  matter  of  request  and  per- 
mission between  the  individual  and  the  government,  so  inter- 
national trade  has  become  a  question  of  bargain  and  dicker 
l)etween  the  different  governments.  For  example,  Sweden  in- 
formed the  British  Government  of  her  intention  to  prohibit  the 
e.\p(5rt  of  fish,  whereupon,  and  not  before,  the  United  Kingdom 
permitted  two  cargoes  of  lubricant,  so  vitally  needed  in  Sweden, 
to  go  forward.'  Japan  bargained  hard  and  long  for  .\merican 
steel  that  she  might  l.i  ■  .1  ships  and  not  hire  or  sell  any  ships  back 
to  the  United  States,  but  we  were  obdurate.  If  we  could  not 
get  some  ships,  we  would  not  sell  the  extra  steel,  and  we  did  n"t. 
It  was  nnich  easier  for  us  to  arrange  with  Britain  for  the  release 
of  the  necessary  burlaps  from  Tilcutta  to  pack  the  Cuban  sugar 
crop.  One  of  the  interesting  war  trade  dickers  occurred  between 
-Argentina  and  the  United  States.  We  wanted  .\rgcntine  v.ool, 
which  did  not  take  much  .ship  space,  and  they  wanted  coal,  which 
took  more  space.  .As  the  shutting  down  oi  the  power,  light  and 
gas  plants  in  Buenos  .\ires  was  imminent,  it  is  plain  that  we  had 
the  stronger  hand  at  the  game.  .An  almost  amusing  eleinent  \\  is 
added  t(j  the  e|)isode  by  the  fact  that  the  companies  using  this 
coal  for  the  convenience  of  the  .Argentine  were  German. 

■  Offifju/  Hullrtm.  July  1.'.  1917.  p.  1. 


lOS  INFLIKNCK    OF    TIIF.    C.RKAT    WAR    ll'ON    SII  IIM'I  NT. 

IJefurc  uc  had  lici'ii  many  montlis  in  the  war  almost  all  the 
Kunpfan  neutral^  camu  to  us  to  lie^,  sendinjj  cotnniissinncrs 
ai'tiT  tliu  fa>hi(in  ut'  the  Allies.  The  arratif^eiiients  with  Xnr- 
way.  wluise  citnitiis.iiuii  was  headeil  by  the  famous  Friiltjot 
Xan>eii,  hern  of  the  Arctic  ice,  i>  tyi)ical.  After  months  nf  ncijo- 
tiatidii  we  linally  made  a  har^ain  with  Norway,  and  the  War 
Trade  ISoard  made  a  pulilic  statement  concerning;  it.'  This  is  a 
reniarkal)le,  almost  a  hulicrnus,  document.  It  sounds  like  the 
scriptural  father  talkinjj  to  the  prodijjal  son  as  he  e(|ui])i)ed  him 
for  a  second  journey  into  the  wicked  wtjrld.      In  part  it  says : 

L'ntil  very  recently  the  hoard  was  eiiRajjed  in  determining 
the  commodities  and  fjuantities  the  United  'states  could 
spare,  her  own  and  her  associates'  needs  and  ;  le  reepiire- 
ments  of  the  other  neutrals  Ijeinj;  given  due  consideration. 

On  January  1>  a  conclusion  was  reached  with  resj)ect  to 
a  large  nmnlKr  of  these  items  and  a  list  was  handed  to 
Ur.  Xansen. 

When  it  was  found  that  further  time  would  Ix;  required 
to  obtain  full  information  concerning  the  (juantities  of  the 
remaining  supi)lies  needed  by  Xorwa)-,  the  board  deemed  it 
fairer  to  state  its  willingness  to  furnish  those  commodities, 
the  (juantities  to  be  iiereafter  fixed  in  accordance  with  Xor- 
way's  necessities  when  ascertained. 

The  proposed  schedule  of  commodities  agreed  to  by  the  United 
Slates  and  her  associates  in  the  war  as  sut'ticient  to  cover  "  this 
year's  X(jrwegian  re(|uirements,  consiilering  the  existing  condi- 
tions," is  very  specific,  containing  among  other  things  the  follow- 
ing items : 

Metric   Ions 

l!rta<l  Rrains,  including  rice  ,?00,OflO 

.'^t.irclifs    1,000 

Sanci-i  anil  i,icklts   80 

Si.icf<    382 

.•Xntiinniiy     12 

Xo  longer  does  Hans  import  at  will.     We  examine  his  larder 
very  carefully  and  conclude  that  he  needs  next  year  just  si!  metric 
'  Ofnciid  JiiilL-iin.  jamiary  28,  1918,  p.  13. 


TR\t)K    UISLOCATtONS    1)1  E    TO    WAR 


100 


tons  <jf  pickk's,  no  iiiorc.  no  lf<s.  No  more  does  he  get,  and  we 
make  him  give  many  promises  as  to  what  he  will  and  will  not 
<ln  with  them,  and  what  he  will  and  will  not  send  to  ("lermanv. 
In  the  meantime  conditions  in  Norway's  larder  are  such  that 
they  are  not  likely  to  export  much  to  (icrmany,  for  the  special 
Correspondent  <it  the  Clirislian  Sciciicc  Monitor^  quoted  Mr. 
Haakon  Five,  Director  of  Kiitioninj,',  as  saying: 

In  fntiire.  the  feedinj,'  of  cattle  on  any  kind  of  ^rain  would 
be  forhidden.  It  would  he  necessary  to  set  aside  a  small 
quantity  for  the  pifjs,  hut  most  of  the  pi^s  W(juld  have  to  he 
killed  whilst  poultry  would  have  to  Ije  reduced  by  two-thirds. 
In  order  to  maintain  the  farm  wnrk  it  was  abMihUely  essen- 
tial to  set  aside  no.ooo  tons  for  fodder,  nearly  all  of  this 
being  apportioned  to  the  horses.  .\s  great  cncjeavors  were 
to  he  made  to  increase  the  area  under  grain  by  1,(M)0,(hm» 
maal,  a  further  so.ooi)  tons  must  Ik-  set  aside  for  seed,  leav- 
ing :.'(»(),()(»(»  tons  for  human  food.  When  it  is  considered 
that  the  normal  im|)orts  into  Norway  of  rye.  wheat,  and  so 
forth  are  generally  some  .">(»(),0()0  tons,  it  will  In;  seen  that 
the  government  have  very  good  reasons  for  resorting  to  the 
present  drastic  rationing. 

The  present  scheme  allows  of  200  grammes  per  dav  of 
all  kinds  of  cereal  and  peas.  The  corresponding  Hritish 
raticjn  is  '!:!">  grammes,  whilst  the  CJerman  bread  ration  is 
much  higher  than  that  of  Norway." 

This  mcely  means  that  at  peace  N(jrway's  food  supply  is  very 
similar  to  that  (jf  i^rance  at  war,  as  indicated  by  the  speech  of 
Mr.  .\ndre  Tardieu,  March,  I'.ils,  in  which  he  implores  the 
United  States  to  send  France  more  cereals : 


You  are  aware  that  the  French  nation  has  always  li\ed 
mostly  on  wheat  bread.  Our  prewar  consumption  was 
700,000  tons  per  month.  Our  present  consumption  has  been 
now  reduced  to  .').'50,000  tons,  a  reduction  of  alx)ut  -'.">  per 
cent. 

;  I'cbru:iry  26,  IQIS. 

'Denmark  found  herself  in  a  similar  situation  iOfficuil  Btillelin,  January 
2.  1918,  p.  2),  and  Sweden  had  preceded  them  both  in  the  adoption  of 
rationing. 


no 


NKI.l  KMK    (II     TIIK    liRKA  T    WAR    I   l'0\     Sll  I  I'lM  NlJ 


Feeding  of  horses  ami  cattle  oti  cereals  which  could  \k 
uscil  \i<r  the  makmn  <<i  bread  has  hceii  prohihited.  This 
resulted  in  a  decrease  ot  .'lU  per  cent  in  the  irunil)er  of  horses 
in  France  and  in  an  important  reduction  in  our  cattle. 

We  have  radically  suppressed,  mi  the  other  hand,  all 
tlour-consuininj;  iii.lustries.  The  nianulacturin),'  of  hiscuits 
and  of  pastry  has  been  completely  prohibited.  Strict  rules 
have  been  imposed  <in  hotel.s  and  restaurants,  namely: 

Absolute  suppression  of  fancy  bread. 

W'c  have  reduced  our  sugar  consumption  by  J!*  per  cent; 
our  rice  consumption  by  "'.I  per  cent;  our  imports  of  dried 
vegetables  have  been  reduced  by  '>-  per  cent;  of  oils  and 
fats  by  4'<  per  cent. 

I  am  aware  of  what  you  have  done  in  order  to  reduce  your 
domestic  consum|)tion  and  to  increase  your  exports.  But 
you  must  do  nmre.     \'ou  must  do  it  U'causc  it  can  be  done.' 

And  still  the  submarines  are  sinking  merchantmen  and  the  war 
ili.-mands  ever  more  shipping.  Trade  is  cut  almost  to  the  lione. 
What  next?  Mr.  Tardieu  says  .\merica  must  make  savings, 
because  she  akjne  can.     He  is  right. 

Scientific  Restriction  of  Trade 

How  can  we  so  change  life  ;md  industry  that  it  will  result  in 
economy  of  shipping?      There  are  three  ways. 

a.  (iittiiig  the  luxury  out  of  our  industry  and  out  of  our  lives. 

b.  Cutting  out  crisscross  trade. 

c.  Developing  home  .supplies  of  heavy  import.s. 


(<;)   Cutting  out  of  Luxuries 

What  is  a  luxury,  a  dispensable  luxury?  The  decision  is  one 
before  which  administrations  tremble,  particularly  in  democracies 
until  they  are  given  the  courage  of  desperation.  We  are  getting 
it — years  too  late.  luigland  and  b'rance  have  already  had  it. 
For  example,  tiic  pleasure  autumobilc  has  long  .since  all  but  dis- 

'  .Andre  Tardieu.  rrviich  High  Commissioner  to  U.  S.    PhiiadclphUi  Sorlh 
American.  March  19,  1018. 


TR.\I)K    DISLOCATIONS    III  K    TO    \V.\H 


111 


appeared  from  Berlin,  from  I-ondon.  and  fmm  Paris,  and  many, 
many  otlicr  things  in  its  wake.  \\  ith  war  loans,  drafts,  priority, 
and  a  War  Trade  Miiard,  we  arc  at  last  moving  in  the  same  direc- 
tion— years  too  late. 

(b)  Cuttimi  out  Crisscross  Tnuic 

In  our  arrangement  of  individiialisin.  with  eaih  man.  each  citv. 
each  State,  seeking  its  own  markets,  and  its  own  supplies,  the 
movement  of  goods  has  been  along  the  lines  of  an  almost  ridicii- 
loHs  crisscross  trade,  commodity  X  going  fnmi  city  P.  to  city 
C.  and  from  city  C"  hack  to  city  M.  Here  is  an  actual  e.\ami)le:  A 
farmer  in  Mcdford  County.  I'a..  hauled  a  barrel  of  apples  to  his 
station,  and  shipped  it  by  train  Jo  miles  to  .\ltoona.  There  it 
was  |nit  upoi\  a  dray  and  hauled  to  a  commission  merchant's 
place.  After  keeping  it  for  a  few  ilays  the  merchant  sold  it  to 
a  man  who  hauled  it  t'.  the  station  and  shipped  it  114  miles  over 
the  .\lleghany  mountains  to  Pittsburgh.  It  was  again  jiut  in  a 
dray,  taken  to  a  commission  hou.sc.  again  sold  and  again  hauled 
l«ck  to  the  station,  put  on  a  train  and  shipped  back  to  Altoona, 
carted  to  a  conmr'^Mon  merchant's  store,  sold  to  a  retail  gnn-er, 
who  hauled  it  to  his  store,  broke  it  open  anil  delivered  the  ct)n- 
tents  in  many  small  lots  to  his  customers.  I'our  sales,  six  cart- 
ings, three  railroad  journeys,  and  all  on  one  barrel  of  apj)Ies. 

We  can  not  afford  that  kind  of  nonsense  when  the  railroads  are 
overcrowded  with  war  work  as  they  are  now.  All  that  waste<l 
work  happened  to  the  barrel  of  apples  because  the  marketing  of 
food  was  unorganized,  luich  man  was  working  bv  himself  in 
the  (lark,  in  an  unorganized  way.  Marketing  must  be  organized 
so  that  we  can  work  together,  and  know  where  to  send  things 
to  make  the  Iea.-.t  hauling.  So  far  as  possible  each  neighlx  irhood. 
each  county,  each  State,  and  each  nation,  must  feed  itself  and  it 
must  be  planned  in  advance.  Out  of  the  chaos  of  individualism 
must  conic  the  precision  of  order,  akin  to  that  to  be  produced  bv 
an  Economic  General  Staff,  which  unfortunately  we  have  ncetlcd 
but  ha\e  not  had. 

I'erhaps  the  reader  thinks  this  dry  land  apple  story  docs  not 


11: 


INrLlF.VCE   OF    TIIK   (iHKA T    WAR    ll'ON    KllirPINU 


apply  to  intcrnatioiKil  trade.  Mm  it  c|.>c!«,  and  thcrehy  hang*  the 
piissihiliiy  lit  -"hip  saving  in  tiic  year  l!il"«.  \s  pr<Hii  that  it  exists 
in  inttrnatiiinal  trade,  I  will  cite  a  few  iact<.  fmni  i>ur  nwn  I'or- 
ei^n  trade.  In  ten  numths  in  lit  1 7  the  liiited  State>  imported 
i'Tt.tHMi.ouo  |Kiimds  of  rice,  and  exported  :.'<»l.tKH).<M»o  |xnmds. 
Some  ot  it  went  to  GViVii',  yet  the  main  sunrce  of  supply  of  riee 
for  the  world's  export  is  Ihirma,  lievonil  .Sm/.  Despite  the 
f.ict  that  luiropf  wails  for  food,  we  imported  in  that  ten  months 
!»•;,. ".(Mi.odo  puumls  of  macaroni  from  I'.nmpe.  We  exported 
U'.ooo.tMMt  punnds  nf  pcainit-.  and  imj)oned  J^.(Mltt,)Mlo  pnmuN. 
enough  to  have  kept  av'.noti  ton  steamer  busy  for  a  year.  It 
sourKl>  unhelievahle,  hut  the  tonnage  liusy  at  carrying  corn  from 
.Iri^i-Htinn  to  the  ('iiift'd  Sltiti:<  in  1!MT  (the  greate-t  corn  pro- 
ducer in  the  world  )  would  carry  i'.(MK).(MM»  bushels  of  wheat  a  year 
to  the  arniv  in  France.  The  list  might  In-  extended.  I)ut  the  point 
is  certainly  proved.  The  existence  of  such  tratHc  in  the  >ear  of 
.ship  famitie  K'lT  shows  clearly  that  government,  despite  its  many 
attempts  to  control  trade,  had  ^carcely  appreciated  that  there  was 
such  a  thing  as  .scientific  utilization  of  .shipping.  The  whole 
Allied  wtirld  is  busy  today  in  the  attempt  to  cut  waste  motion 
out  of  trade.  Let  us  hope  that  it  succeeds,  for  it  will  he  one 
of  the  great  achievements  of  the  war,  and  should  endure  to  some 
extent  after  it  is  over. 

The  same  thing  needs  to  he  done  for  every  little  town,  for 
every  big  city,  for  every  nation,  as  well  as  for  international  trade. 
I'.ngland  ha>  tried  it  with  her  railroads  and  htr  coal  by  districting 
the  regions  of  coal  production  and  regi(jns  of  coal  consumption, 
-so  that  coal  would  move  in  the  shortest  and  most  direct  line  from 
mine  to  furnace  door.  The  I'nited  States,  through  the  I'nel 
.\dministration,'  has  attempted  to  do  the  same  thing,  and  our 
War  Trade  I'xjard  with  its  export  licenses  ai  !  import  licenses 
must  of  course,  as  soon  as  possible,  apply  itself  to  the  task  of 
so  controlling  our  imports  and  exports  that  there  shall  not  be  a 
single  ton  mile  of  >hip  space  wasted.  Let  us  hope  that  the  trade 
statistics  of  r.'is  when  they  are  compiled,  will  show  an  almost 

'  Of.cial  Bulletin.  January  3.  1918,  p.  5. 


TRADE   OlSLOCATIO.Vft   DIE   TO   WAII 


11'! 


(xmpletc  ali'ienre  xf  the  nntnxinf;  cri!(<«<;r<M<t  trade  that  !«till  existed 
itt  iiitcniatiniial  trailc  a*  late  as  1!M7  when  the  rnitcti  State?* 
imported  alMUit  i',(mn>,(mm»  tuns  «if  sUKar,  ami  rccxpnrtcd  tlJT.fHMi 
Umn  of  it.  In  that  iiie  item  is  a  hiiue  vessel  ninvcmeiit.  In  ten 
nmnihs  nf  that  year  .ve  impnrted  1.(i«»:.,0(M)  Imshcls  <>f  \x.\\u  an"! 
exp'Tted  l.<MM(,(Mt<(.  \Vc  im|X)rtcd  cottunseeil  fmrn  Urazij  and 
H-nt  cottonseed  oil  hack  a^ain.  They  should  have  made  their 
own  oil,  fed  the  meal  to  their  own  cattU-  ami  ex|Mirted  the  meat 
to  r.rilain.  Despite  the  famine  of  food  'ats  in  Iuipijh;.  our 
rnnsiil  in  Malasa.  Spain,  re|)ortcd  in  the  autumn  of  I1»I7  a  sub- 
stantial increase  in  exjMjrt  of  olive  oils  to  the  United  States.' 

'rhrouRh  the  exjxirt  license  intelligently  applied,  wc  should  see 
to  it  that  ihirinR  \'.*l>  and  any  succeedni);  war  years  we  lirinj; 
nothing;  to  our  sh<)rcs  that  ilocs  not  need  to  come,  or  that  we 
can  produce  here  ourselves.  .\nd  the  same  thing  is  lieing  applied 
liy  our  allies,  ami  the  saved  space  will  Iw  needed,  every  tun  of 
it  for  many,  many  months  even  if  the  submarine  is  put  under 
control. 


(c)  Developing  Home  Supplies  of  Heavy  Imports 

A  couple  of  years  ago  a  highly  educited  young  German  said 
to  an  American,  "  We  would  have  no  trouble  fixing  you  if  you 
got  into  the  war.  We  would  just  send  a  few  submarines  to  blow 
up  the  ships  that  bring  you  manganese  ore  from  IJrazil  and  your 
steel  industry  wDuld  crumple  up  so  that  you  couldn't  do  any- 
thing." 

Therefore  safety  and  ship  economy  alike  .should  urge  us  to 
make  every  effort  to  reduce  the  import  of  vital  ores  of  which 
mangrinese  is  the  most  es.sential  alloy  for  high-grade  steel  for 
munitions  .md  important  industrial  uses.  The  war  has  doubled 
our  import  of  it.  Flake  graphite  is  necessary  for  the  crucibles 
to  make  crucible  steel  and  brass.  Tungsten  is  necessary  for  high 
speed  to(5l  steel,  and  is  supposed  by  experts  to  be  the  material  of 
the  new  and  terrifying  74-mile  gun  of  the  Ciermans.     Anliniuny 


'  U.  S.  Comnwrcc  Rcforls.  November  12,  1917,  p.  580. 


Ml 


INH.IKXCK    or    Tlir    lillKAT    \V AH    I  IIIN    millTIXr. 


i»  rntiiirctl  «'.>r  harilrninK  Icail  l>ul!cl>*.  (  hr<>mitr  i«  uiwtl  it>r 
niiikiii^:  armor  \t\aw.  Mauiic^itf  and  mica  arc  aW>  inili«|H*iHal>ttf 
ill  iiiitalliirKiial  iinliistric<.  Secri'tary  ni  ihv  Jiitciur  l.aiu-  laiil 
(  rdiniarN,   IIMn). 


Aim-riiati  miiu'«  laii  jipkIucc  all  "f  tlic^f  mineral,  proviilitij; 
they  are  jjiven  tin-  in'i-«'<i<.ary  a-c^i-taticc  .'t  iju-  fcilt-ral  kdv- 
iriiiiHiit.  I  have,  tlu-rftnrc.  a«kv<l  Lniinre^  to  make  a  >|»c- 
cial  appMpnalinii  vi  thai  a  larj-c  I'orci-  ><i  mftalhirKi'.i,  can 
\k'  set  to  wiifk  iiiimcdiattly  on  the  nccssary  changes  in 
practice  to  u«e  lovvcr  yraile  matif^ancw:  ore*. 


«i- 


Fhe  rr<|ue>.t  of  the  Secretars    i>  \\i>e,   tor  herein  lie*  the  p. i«« 
liiiity   oi   increa»inj{  the  national  >ecurit\   and  reducing  toiinane 
that  now  hriiiKs  u*  l'.immmhmi  i.hh  ,,f  mineral  ini|»ort>*. 

Tkadi;  Ai-tkk  nil.  War 

.\t  the  present  nionjeiu  every  nation  on  eath  is  hein;;  coin- 
la'lled  liy  ship  shortage  and  tra<le  restrictions  to  reverse  the 
process  of  the  last  half  century  and  liecoine  increasinj-ly  inde- 
pendent in  the  development  of  lioinc  industries  to  pr.  .Inc.  prod- 
ucts previously  hrought  overseas.  Some  of  these  war  industries 
will  he  found  to  haw  a  nalitrally  ])ermanent  hasi^.  Ipon  the 
return  of  peace  others  will  naturally  |,'o  down  as  quickh  as  they 
came,  unless  tariffs,  iKuinties.  and  other  forms  of  natioii.d  pro- 
tection and  price  raising  lie  more  widely  enforced  as  a  part  of 
a  worldwide  policy  of  national  iiide|R'ndence.  This,  unfortu- 
nately f(ir  the  we.iltli.  comfort  and  jieace  of  the  world,  ina\  ijuite 
possihly  lie  the  case.  Some  of  the  war  industries  will  certain!)  Ije 
jirotected  either  hy  natural  conditions  or  ;;(ivcrnmeni  aid.  M'ch. 
f(jr  example,  a-  the  liritish  and  American  dye  indu-tries,  the 
American  optical  j^Iass  industry,  the  restored  I'.ritish  agriculture, 
which  has  natural  resources  and  market  in  favor  of  it.  Among 
the  (|uickl\  perishing  w.ir  industries  we  may  pnrhaiily  clas>  most 
of  the  numerous  and  relatively  unsuccessful  attempts  to  pr.idnce 
p<ilash  outside  of  (iernianv. 

The  tr.ide  in  manufactures  will  attord  the  i;reatcst  field   for 


TK\I>».    MtsiUHATION*   DCK   T(>   WAR 


ll.'> 


proltthle  rca<liu<.inwnl.  llnKlaml,  France.  Italy,  ('lermany.  an«l 
Attitlria,  \\\\\  liavr  rttany  K"*"*'  rca«>ri'«  f<>r  withing  ami  ncciltnK 
to  will  lock  their  |.>»t  market*,  lust  tn  Ja|»an.  Lnitcil  S«iatir!t.  and 
the  |»rc"*vnt  neutral*.  I'ne  |K)int  <»f  vievN  that  Umkn  \\\n>n  our 
eneiniv*  nf  «»iir  im{K»vcri!theil  allie*  a»  |»«H»r  f(im|»etitnr«  after  the 
war  i">.  I  lieliivc.  mintakcn,  Becauv:  <>f  their  |K)Vcrty  they  will 
have  great  need,  and  will  !«  cum|»ellcd  to  do  the  necessary  thinn* 
to  win  trade.  In  that  respect  they  will  have  a  certain  resem» 
hiancr  to  t'hina  and  Japan,  who.  Iiecausc  of  their  fvivetty.  arc 
Muh  doughty  ii)ni|R'titnrs  in  the  indiKtrie-*  for  which  they  have 
the  rcoiirce*.  There  will  lie  le>««  shortage  of  man  iH)wcr  in 
Mnripi'  than  we  think;  for  despite  the  looses  of  the  war  the 
sini|iliiicatiiiii  of  cotiMiniption  forced  l>>  the  war  will  tend  to 
reduce  the  scale  of  livinK.  The  sfieedinK-up  an<l  reornaniiation 
priice-i^co  of  flu-  war  have  increased  the  rate  of  output.  .\lan\ 
new  mechanical  inventions  have  U-en  made,  «o  that  every  m.m 
killetl  or  maimed  is  much  more  than  repl.  ccd  hy  the  enormous 
improvement  in  mechanical  piwer,  technical  processes  and  iiuliis- 
trial  organization  that  have  come  during  the  war.  .\s  a  result 
the  I'uropean  countries  will  emerge  from  the  war  with  a  greater 
producing  fxiwer  in  manufactures  and  al8<j  in  agriculture  than 
they  had  at  the  iieginning. 

The  new  government  control  of  imiustry  will  of  necessity  con- 
tinue for  a  time — how  long  a  time  it  is  indeed  interesting  to 
s|K-culate.  The  record  of  the  old  prewar  industrial  system  is 
against  it.  The  complete  inadeipiacy.  the  gross  incfticiency  of 
indix idualistic.  unregulated  industry,  when  examined  in  the  light 
of  strong;  nationalism  and  war  needs,  has  been  a  great  shock  to 
thinking  jieople  in  the  .\nglo-Saxon  world.  It  should  lie  noted 
that  the  war  emergency  I'.a.s  created  nothing  new  to  take  its  place. 
It  has  merely  iKiirowed  the  personnel  of  the  old  system  which 
they  have  laid  aside  for  a  time — a  time  of  industrial  truce.  This 
truce  must  last  for  a  time  after  the  war — and  then?  England 
has  already  announced  her  intention  of  continuing  government 
control  for  three  years  after  the  war.  We  may  depend  upon 
it  that  this  time  will  be  utilized  to  the  full  to  develop  the  export 


Ilrt 


iNfLt f^irr  iiK  rur.  r.nt  \r  w  \«  i  ii.\   ^mirrvii 


trade,  fir  wlmh  very  ci.m|)r«liin»iv«'  pl.uix  arr  nWv.uh  liriin;  ca«. 
lully  m.iHiri'.l,  \\\-  lu-.ir  niiti.rr»  ,.f  maiiN  <.rrni:iii  |tl.iiiv  Imt  ..ttr 
kituwItilKv  >'i  1'nKl.irul  i.  ;»rtalcr.  I  <,r  v\;mi|.l.-,  ilic  \iii«Ti(.m 
C'tiMil  at  t.ntu|.>ti  ri|...rl^'  ilrt  the  Mritioh  Mmi,t»T  ..i  Kci-mi- 
itriKti.'ii  \un  a|i|»..imci|  a  o mmtftiT  ..it  lliiaiuial  r.uiliiu-.  atti-r 
thv  v\ar.  Thv  cluiriiiaii  ..i  ilii^  r..iiiniittct;.  ttu-  iitVMiU-iii  ..i 
l.ttiulx  l'.aiik.  iiiic  .1  ihf  («,.  larjict  thitiki  in  Mriiaiii,  |>..jni«  utit 
fh.il  »liilf  i;'.Mriiiiicitt  f.  titrMi  itu>  imt  la«t  altrr  ilic  war.  iii-ln.- 
lri.il  .iri;am/ati.ii.  ha<.  ctrt.iiiily  c-mic  to  «ta>,  lie  w  i|iiiti'  riKiit. 
A-.  an  <\.ini|>lc  ni  this  inijnstrial  iirKani'ati..n  attei)li..ii  nia\  Ik^' 
Ciilifd  to  ilu-  ■'  Itrilioii  Mamit.ictiircr*  «  .,r|M.rati.  n."  '  an  •ifKani- 
zati.in  t.>  prnni.lc  isjh.rl  trade,     its  avowed  purpose  U  tn 

uiect  ihe  necd>  ..f  llriti-h  firms  after  the  war  n%  re;,Mrd< 
fmaiui.d  taiilities  tur  trade.  Aeorditij;  tu  it*  pr<.>|)ectii». 
the  I'.riiidi  !  rade  (  ur|>..ratinn  will  s|Kciall\  devitc  if,  ener- 
gies I.  the  tr.ide  I.I  the  i'.riti4i  l.tnpire  in  e^tr\  pan  .f  the 
wnrld.  It  mieiuN  tn  lend  v<  exporter,  .in  longer  iTi-dii  than 
hanks  eaii  uf'tir,  and  h>  ujumi  new  ^^arket^  tor  l!riii,h  nidns- 
tries.  and  to  eiteet  I'nrther  coordniation  u\  commercial  and 
ituhi<itri.-il  undertakini,'!*.' 

It  has  pjanneil  to  have  one  thoii>and  miinlar>  who  ,»il|  pay 
$.'0(1  to  ^\,mH>  i;idi  per  year.  Its  an'hon/ed  ,apit.d  i,  *:.it,- 
•i(M»,(MM»  an.l  all  share.  olTired  have  heei,  taken.  The  -.r^jani/a- 
ti.in  will  have  agents  ;,l,ro,,d  who  will  r.-nive  ample  cofnptn..ilion 
and  devote  their  wliok-  time  t..  tinditi-j  local  lirnis  who  will  .ki 
as  ajjctits  for  variou>  I'.ritidi  maimfactnrcr-.  and  .loitij;  all  that 
they  can  m  their  territory  to  promote  liritidi  export.  1  lii>  pr  =- 
posed  organization  is  an  adimrahle  eNample  of  the  Hriti^li  w;i\  of 
doinc  things  hy  private  ory.mi/ations  freed  fn.ni  the  limitations 
of  .Iticial  red  iai>e.  IVrson.  who  fear  >tate  socialism  ,honld 
,^ive  more  attentioti  to  this  private  colli.cti\  ism  of  I'.rit.nn.  hits 
Lloyd's  Ke-i.ster  of  .SliJppniiLj  has  a  hoard  of  .lirectors  madv  up 

'  Ogi.ial  Hiillcltii.  Jaiiiiarv  ''.  I'MS.  p,  H. 
Il'id..  J  iiuia:>    111.  I')I8,  p.  .;. 

/■.l.*'!""''''/AV  /'"",'**■'',"'•,  ^'7    ^"''^    '•'•>•■    Cooffrah.n    u<„Ur    Ilu-    /(.•/■/.. 
fom,-r,n,-  H,ll  f:,r  ih.-  KclialiUtalU'H  vf  i-urofi  afhr  ,lu  tl  jr.  p    IJ 


THADK  m«i.nc,\Tio>iii  DiK  n»  w  \« 


117 


<  i  the  lf.i.|in«  r>ti<ino«  men  <>(  thr  nhippinR  w..rl.|.  whn  reKard 
rhcir  iiti|>ai<l  |»..%iii,,ii  a*  dirctior.  ><(  l.U,yl\  Hiui.icr  a*  ..Me  ..( 
tin-  ifrfitle.t  h..iti.r«  i>t  their  tivev  The  nrgani/.iii.iti  ha»  r«-pr«-- 
•rtitaijvr*  in  many  f.. reign  p..rf».  Tliey  arc  well  paiil  ami.  Itk? 
ilie  tervant^  nf  pivernmrnt.  |K-n.i.ine.t  when  they  retire.  It  i* 
ea«y  to  ht  ilic  '  llriii.h  MaiitKaciurert  (  ..rixiratmn  "  ra  >i<lly 
.IcvtlopiuK  into  the  »ame  type  nf  pfWcient  in»tiliitii«i.  which.  f..r 
""■inilnc*-  uf  wurk.  i«  more  re»|»ecte<l  than  any  Kovernment. 

\\  hile  ihr  Uriiixh  Tr.ide  I  i-riK. ration  »a«  inider  cnHi.ler- 
aiioti,  the  IVtM.lrnt  of  the  IV. It-rat i-.n  of  Uriti^h  ln.|ii«irv. 
-fH-akinj;  <pt  the  jirrjKiratiotn  nea-«'<ary  for  condition*  aftei 
the   war,  *ai.|     "Otic  thiiiK  that  ha>.  Iwcn  ohvioti*  in   th< 


ter 
in««  in  the 
iiif  liy  cxtrn^ivi-  comjwtition  lie- 
tNxeeii  Comparatively  -tniall  lirm«>.     This  iiiiiM  l«  eliminatc<l 
Ml  the  future.  " 


pa^^f  has  U-eii  the  harm  doi 


III   I; ranee  a  Mmilar  enterpriw.  utuler  the  name  of  the 
.Laoiiiili.iH   Wilioniili-  ,ir.xf-onsi»n  liivni'mujtw.  ha«  I* 
orjs'ani/fil  to  promote  the  ccunumic  expansion  of  France 
forciun  tnarkets.' 


•en 
in 


Meanwhile  the  British  (iovermnent  i»  al<h)  shakiiiK  itself  awake.' 
The  IV.reixn  Office  and  the  Hoard  of  Trade  which  have  lonR 
jaii'^'lid  .  .IT  their  authority  in  trade,  have  joined,  forming  a 
joint  intelligence  department  which  will  have  entire  charge  of 
matters  pi-rtaiiiing  to  trade,  and  one  of  the  first  steps  is  to  in- 
crea.se  the  |)ay  of  consuls  and  attaches. 

The  Mritish  Minister  of  Reconstruction  now  prop«)ses. 
after  the  war,  to  im|Mirt  raw  materials  ri-(|iiired  for  British 
maiuifaituies,  and  to  ,ill.K.ate  thcni  among  various  isiah- 
lishnunls  aiinrdiiig  as  the  llrilish  trade  ass.iciations  may 
su«nest.  His  proposal  indiulcs  plans  utidcr  which  these 
British  trade  associations  shall  survey  their  res|)ective  iii- 
du<trics,  determine  the  equipment  rc«iuirements  of  their 
memtterv,  explore  the  possibilities  of  new  dcvilnpmeiit. 
maintain  a  bureau  of  information  regarding  the  Ixst  means 

'  fiilhrrf   H     Mnlit.lKUr,  ../>.  ,\l. 

'  Offii  uit  tiulUtin.  January  lU,  1918,  p.  8. 


11^       iNiLi  i;m  i:  (iK   rm:  (;i<i:\t  \v.\«  ivns  siiiitim; 

of  |)rn,liKni()ii.  and  e\cliaiipe  data  rcyardiii.i;  tlic  pricfs  lor 

llU-   lUcitCftiiill    n|    Cl>IlMlllH.T>, 

I'arliaiiiem  aln-ady  lias  iiiidtT  iMii>idiTatioii  tlic  Xmi- 
i"iTrou>  l!i!l,  rtTcntly  iiiiicidiUTd  liy  tlif  liritisli  (lovorntiuMit, 
uliii-li  pr.'vidi-s  that  no  nnt'  in  Croat  I'-ritain  >liall  deal  in 
copiKT.  tin,  zinc  and  nickel,  lur  a  period  of  live  years  after 
the  war,  unless  he  has  a  license  from  tiie  pnernnient,  and 
tliat  no  niie  who  has  been  a  subject  of  an  enemy  country 
shall  obtain  such  a  license.' 

Meanwhile,  of  course,  the  I'nited  States  and  Japan  are  doin^' 
•the  evpurtinj;  because  they  have  less  war  strain  and  therefore 
nil  re  suriilus  j,'oods  tlian  blii-jland.  Ikit  the  record  of  trade 
lalistics  durini,^  the  w.ir  is  a  very  deceptive  basis  to  use  as  a 
,!,'auge  for  what  will  happen  after  the  war.  The  folic )win,<,' 
passage  from  otticial  American  sources  seems  to  me  to  be 
peculiarly  sugj,'esti\e.  alike  in  its  description  of  the  present,  of 
the  i)ast.  and  in  its  inferences  descrijitive  of  the  future.  The 
Othciul  lUtlUtin  (  Xovember  I.  I'.MT.  page  ;) )  (piotes  the  f.  S. 
Department  of  Cumnierce  as  s:i\ing: 


I'ractically  all  the  news  jirint  paper  that  is  received  by 
Peru,  r.ulivia.  and  Kcuadur  now  comes  from  the  I'nited 
States.   .    .    . 

E'revious  to  the  war  nearly  .">(i  per  cent  of  the  paper  im- 
ports of  Peru  came  from  (iermaiiy,  l'O  per  cent  from  the 
I'nited  States,  lo  per  cent  from  .Spain,  France,  lielgium, 
Italy,  and  other  luiropean  countries.  The  ])rincipal  factors 
in  the  luiropean  strength  according  to  the  bureau's  report, 
were  lower  prices,  longer  credits,  better  shipping  facilities, 
more  active  selling  cam])aigns,  willingness  to  produce  the 
goods  desired,  better  jiacking,  greater  attention  to  detail, 
and  inlluence  of  I'.uropean  colonies  engaged  in  the  paper  and 
printing  trades. 

This  passage,  which  sounds  like  a  fearful  arraignment  of  our 
C(jmniercial  capacity,  could  be  essentially  tluplicated  from  a  hun- 
dred official  sources.     It  is  really  a  statement  of  the  fact  that 

'Gilbert  H.  .Montagut,  op.  cit. 


rUADK    KISl.niAl KINS    DfK     I'd    WAK 


ll'.t 


lictiirc  llif  war  w  c  were  not  in  a  positinii  to  seek  forei>;n  trade 
serioti>l\.  I!a>  the  war  changed  lis?  It  is  true  that  the  L'nited 
^-...tes  also  lias  heen  niakinj;;  rapid  strides  toward  developiii);  f()r- 
r  gn  trade.  We  have  impro\ed  our  international  hankiii},'  system. 
V'e  have  ori,'anized  a  j^reat  jirivate  corporation  to  ])roniote  for- 
ei>;n  trade,  hut  more  especially  loreij^n  investment,  and  we  have 
malched  the  luiropean  countries  hy  passing,  .\])ril  1(»,  lUls,  the 
\ei\  comprehensive  \\'el)l)-I*omereiie  l>ill,  which  enahles  .\meri- 
can  m.ni.ifacturers  to  do  ahuost  anythinjj  tliat  is  needcil  to 
develop  exports.     Whatever  is  needed 


can,  under  reasonahle  conditions,  and  with  certain  for- 
malities, he  acconiplislietl  under  the  W'ehh-I'omerenc  IJili,  so 
lonu'  as  trade  within  the  l'nited  States  is  not  affected,  and 
so  lont,^  ;is  there  are  no  unfair  methods  against  some  outside 
.American  coni|)etitor,  who  al.so  is  enga,i;ed  in  the  American 
exjKirt  trade.    .    .    . 

What  are  these  mclh(jds  and  arrangements? 

Plainly.  the\  are  only  those  methods  and  arrangements 
that  app.irently  raise  sonic  i|uestion  uiuier  the  anti-trust  laws 
— representation  abroad,  for  instance,  for  groups  of  com- 
petitive .American  concerns,  hy  common  selling  agencies,  or 
Common  sales  hranches.  or  other  cooperative  seUing  organi- 
zations in  foreign  markets,  and  all  manner  of  contracts  or 
understandings  hetween  competitive  American  concerns,  re- 
specting the  apportionment  of  onlers,  profits,  losses,  husiiiess, 
or  territory,  or  agreement  regarding  prices,  in  foreign 
markets,  upon  any  basis  whatever,  when  trade  within  the 
l'nited  States  is  not  affected,  and  when  no  unfair  method  of 
competition  is  prr  iced  against  some  outside  .\merican  com- 
petitor who  also  is  engaged  in  the  .American  export  trade.' 


Whatever  results  may  follow  this,  the  P.ritish  at  least  fear  us. 
but  perhaps  they  overestimated  the  menace  thus  described  by  the 
iUienos  Aires  ccjrr^  spondent  of  a  British  journal: 


Directly    the    war    is    over,    it    is    argued,    and    British 
traders  are  able  to  deliver  the  goods  as  heretofore,  the 

'Gilbert  11.  Momague.  of.  cit. 


l-.'O 


INT  mi:  mi;  nr  Tin:  (,ki:\t   war   ri'(i\   siiiim'IN« 


VaiikiT  will  ilisapiH-ar.  I  am  (liiliioii-.  TIu'  North  Ameri- 
can is  firmly  fstalili>liin;,'  liinisflt  m  tI^i^  matter.  Mvery 
steamer  hrinjjs  down  several  keen  hiisinc-.  m  .1,  and  these 
men,  who  used  to  he  mere  travelers,  are  now  iieeomin;,'  resi- 
dents. It  is  hardly  likely  that  they  will  he  shaken  off  with 
C(  nsunnnate  ease  alter  the  war  is  over.  They  arc  making; 
money  for  a  rainy  day;  they  are  learnini;  rapidlv  hv  experi- 
ence, and  haviiif,'  hanks  hehind  them.  It  wonld  i)e  really 
unwise  to  count  on  their  disappearance  after  the  war  It 
is  my  opinion  that  tiiey  will  he  greater  rivals  than  the 
Germans.' 

But  it  should  be  rtmemhered  that  we  have  not  been  a  trading 
pet.ple  and  that  we  have  had  little  practice  in  the  real  art  of 
lorei.un  trsde  during'  this  present  war.  If  there  is  any  art  that 
has  not  been  needed  in  the  foreit;n  trade  during  the  war,  it  is 
tile  art  of  salesmanship.  For  the  present  it  may  be  called  a  lost 
art  or  at  least  a  slumbering  art.  In  times  of  peace  the  foreign 
market  has  been  hard  to  cultivate.  Experts  have  persuaded  cus- 
tomers to  buy.  In  this  period  of  war  diplomats  l)eg  for  goods, 
>pecial  embassies  cross  the  seas  and  camp  for  months  at  Wash- 
ington tr\ing  to  persuade  us  to  let  the  goods  that  lie  in  their 
ships  go  forwartl.     .Xnd  they  often  Ijeg  in  vain. 

We  may  want  to  hold  some  of  our  newly  w(jn  war  trade,  hut 
the  holding  will  not  be  easy.  The  most  important  single  factor 
m  the  development  and  prosecution  of  foreign  trade  is  the  trade 
<irganization.  a  thing  which  statistics  do  iK-t  touch.  The  organi- 
zation of  international  trade  in  brief  is  this:  A  wholesale  firm 
ni  .Melbourne.  Ikieiios  .\ires.  or  Kio  Janeiro  has  dealings  with  two 
or  three  hundred  retail  merchants  s.-attered  over  its  own  city 
and  in  many  inland  tt)wns.  The  relationship  is  largely  a  per- 
sonal one.  The  retailer  knows  somebody  C(innected  with  the 
wholesale  house.  The  wholesale  house  has  purchasing  branches 
m  New  Nork.  London.  I'aris.  Hamburg,  or  Berlin.  Its  real 
headquarters  may  be  in  any  of  the  cities  mentioned.  It  buys 
goods  wherever  it  can  secure  them,  and  sends  them  out  on  any 
steamer  that  offers  service.     Sonietiines  these  firms  even  own  or 

'Fail-flay.  May  11,  1916,  p.  751. 


tradf:  I)Isi.(1(\ti(»ns  di  k  to  w  \k 


iL'l 


cliartcr  steamers  fur  their  duii  Inisiness  and  take  jjoods  tor  nthers 
alsi  I. 

What  lias  the  war  done  to  this  orsanization?  Statistics  do 
not  sh(i\v.  As  a  matter  of  tact,  ("lerman  firms,  when  (icriiian 
steamers  were  tied  up  in  l!»n,  pnmiptly  chartere<l  \(irwe{;ian 
ships.  They  even  cliartered  I'.ritish  ships  which  were  insured  in 
the  I'.ritish  War  Risk  lUircau.  and  which  carried  P.ritish  or 
American  or  French  rockIs  to  the  (lerman  firms  with  the  many 
lucal  connections.  later  came  the  Mack  list.'  which  was  of 
conrsc  met  by  camoutlage  in  change  of  name.  The  sign  of 
Hans  Mittendorf  came  down  from  the  Argentine  warehouse,  and 
in  its  place  one  read  that  Alfonso  Diez  conducted  the  import 
business,  Init  Hans  was  still  inside.  Alfonso  had  lieeii  a  trusted 
clerk.  Hans  became  a  trusted  and  obeyed  manager  for  .\lfonso, 
:md  the  same  salesmen  visited  the  Argentine  back  country  :in(l 
they  sold  any  goods  they  could  get  and  they  will  in  all  prolwbility 
be  there  when  peace  is  declared.  In  China  in  llti:.,  German 
firms,  no  longer  able  to  get  German  goods,  were  handling  Eng- 
lish. I'rench.  .American,  and  even  selling  Chinese  goods  to  the 
Chinese.  The  United  Stat  'is  of  course  had  an  undisturbed 
chance  to  build  up  trade  ot  ization  during  the  war.  but  the 
stimulus  of  competition  has  been  lacking,  and  it  would  probably 
be  ovcroptimistic  to  think  that  we  had  in  that  time  developed  any 
iuf>cnorit\  over  Europe.  German  interests  at  this  day  have  title 
to  an  uncanny  amount  of  property— vital  raw  materials  in  for- 
eign countries,  some  of  which  they  are  reported  to  have  secured 
since  the  war  began. 

The  trade  in  the  decade  after  the  war  will  l)e  one  in  which  it 
seems  inevitable  that  competition  will  be  keener  than  it  has  ever 
been  before,  with  every  prospect  of  more  government  aid  than  it 
has  ever  harl  before.  It  should  be  remembered  that  in  this  matter 
of  extending  government  aid  to  industry,  Germanv  has  the  mas- 
ter hand.  Government  aid  means  a  favorable  price  list.   After  the 

'  W  hen  one  considers  the  way  that  the  American  at  home,  using  the  device 
of  mcorporation,  has  for  dv^'cades  opcnlv  fiouted  the  t)liiin  will  of  the  people 
and  the  lawmakers,  it  is  easy  tn  helieve  that  a  black  list  is  a  very  weak  tool 
with  which  to  break  up  a  commercial  organization  in  a  foreign  land 


'--  IMI.I    l\ir.    c(|-    Mil-    <;U1   \l     \\  \U     1    PO\     SIIIITINC 

war  the  ]itii-f  li,r,  >alfMiiaii>lii|i,  thf  ilfsiro  t.i  jilcaM-.  rrfilit  and 
liaiilon;,'  laiilKHs  (••.iKvially  tlii'  pritf  li-t  and  the  doirc  ti> 
I)lta>c— will,  a,  in  tin-  prt-war  pcric'd.  win  m.,yt  ,,f  the  traltic.  In 
tlicsi'  ii>i)L'ct>  the  I'.urupcan  lower  \\:\'^v.  a>  in  the  past,  particu- 
larly tlic  li,,ver  wayc  of  the  continental  peoples,  promise-,  to  f,'ive 
them  1,1-  in  the  past)  an  advantage,  lertainly  the  youiij;  men 
oi"  (lermaiiy  will  c,  iitiniie  to  work  in  Sonth  America  for  le>s 
than  tile  v.,un^  men  .-t"  Xortii  America.  .\nil  niilos  the  I-aii^lisli 
and  Americans  chanj^e  their  ways,  they  will  not  lie  loved  in  for- 
eign p.irts  ,i,iy  m.iie  in  the  tufiire  than  they  have  heen  in  the 
past,  and  in  many  countries  the\  will  have  no  sentimental  advan- 
tage, ft  is  nnoliicially  reported  th.at.  owing  l;ir-cl>  to  the  Rus- 
sian dislike  for  the  Ijiglish.  over  three-fourths  ,,f  the  r,,(Hi(i  iuig- 
lish  tirms  in  Russia  were  driven  out  in  less  than  a  yea-  .ifter  the 
overturning  of  the  C'zar. 

In  making  predictions  for  jxistuar  tr.ide  developments,  we 
have  no  rea.son  to  expect  any  permanent  results  from  the  war. 
except  where  there  has  heen  some  permanent  ch.inge  in  the  rela- 
tive powers  of  the  competitors.  The  fundameiu.al  conditions 
underlymg  trade  are  resource  conditions.  These  will  have 
changed  hut  little.  The  wh,.le  world  \v  ill  have  reduced  its  capital, 
luirope  more  than  America.  That  merely  means  that  luirope 
\\dl  have  the  same  relation  to  the  world  market  th.it  the  imem- 
ployei!  man  at  the  gate  has  upon  the  lalior  market— that  of  a 
price  cutter.      In  the  words  of  Otto  11.   Kahn : 


We  sh.all  h.ive  to  meet,  after  the  ret'irn  "\  peace,  both  in 
our  own  coimtry  and  .ahmad,  the  onset  of  the  Inisiness  men 
of  l".uro].e.  -purred  on  hy  ,|ire  ncce-sity  to  put  forth  their 
uitu'i.t  ettoris,  tniined  to  discipline,  coojierafion  and  in- 
ventiveness in  the  cruel  school  of  years  of  desperate  w;.r 
upon  thejr  own  soil  or  at  their  very  door,  hacked  hv  the  full 
l).>wer  of  their  respective  governmems  and  the  law's  ,,{  their 
C'nmlries. 


It  Is  easy  I,,  think  ihat  these  spectacular  changes  of  today  are 
re\ohui(;n  when  they  are  merely  rotation.     Go  back  to  the  trade 


IKVDK    l)l>I.(i(   \  I  |(i\>    1)1    I      rii    WAK 


I  •.'■; 


liter.'ilurc  ni'    1'. ami    I'.'tii    wluii    liritain   ua>  lut<v   with   tin- 

liner  War  aiul  a  cual  -triki-  ua^.  <iti.  ami  \(iii  can  rcail  ]\>i  end 
of  pnipliuiii-  ii(.ii'«ciisi-  lia>(.(l  •  II  the  a-«Miiii|)ti.  ii  that  we  had  caj)- 
tured  the  Wi:rl(rs  trade  fnrever  hecaii-e  ue  liad  made  a  lew  --ales 
while  I'".ii,i:laii(l  was  temimrarily  eiij;a.i;ed.  Trade  deiRiid-  eliielly 
•  111  the  delivered  price  .if  the  sati>l'aet.ir\  ;;n(ids.  Thi.  mean-, 
factiiry  cnst.  |>In>  neean  I'reij^hts,  |)hi^  hankiiii;.  plii<  iiiMiranee. 
1'Ims  the  <ir-aiii/ation  in  sell,  |)]ii-  the  williii',Miess  tn  please.  The 
evidence  i>  11.4  yet  in  haml  In  -,U,.\\  that  we  in  America  will  have 
any  new  relative  Miperimitv  (Aer  !utriij)c  in  anv  niie  <<i  these 
six  Cdunl.v  It  ist|iiite  likely  that  the  iieavy  hormwiiiKs  '>i  lluiope 
in  this  Cdiuitry  will  jnit  us  on  an  inllated  niMncy  liasis  th.it  will 
result  in  a  hifjh  price  level  that  will  leave  the  export  ndvanta^je 
with  Kuropc  until  we  cmne  down  from  our  hi<,di  hor-e.  Wo  will 
he  safer  if  wc  merely  rej,'ard  the  war  in  its  foreifjn  trade  a-pects 
as  a  melon  tiiat  has  hecn  cut.  tn  he  followed  hv  the  les-er  melon 
of  hclpinj;  reconstruct  devastated  luimpe,  and  then— competition. 

drcat  lalxir  unrest  and  discontent,  serious  industrial  dis- 
placements, larjje  financial  adjustiuents,  enormous  tax 
hurdens.  and  the  ilepressint;  anxiety  resulting  from  cata- 
clysmic chanj,'es  and  ahysmal  uncertainty,  will  then  weigh 
heavily  upon  h.urope.  and  pre.sumahly  l)e  shared  in  xjitic 
degree  hv  America. 

Purchases  in  .\merica  after  the  war,  fur  account  of  Euro- 
pean reconstruction,  will  undouhtedly  he  more  or  less  cen- 
tralized, either  in  government  agencies,  or  in  unotticial  hut 
noncompeting  huying  agencies  for  foreign  interests.' 

We  .see  ijuite  as  nuich  in  the  puhlic  press  now  alxjut  tarifT  which 
is  a  trade  harrier  as  we  do  about  the  promotion  of  trade.  Any 
discussion  of  foreign  trade  should  reckon  with  the  fact  that  the 
average  .\merican  does  nut  seem  to  have  the  mind  or  stomach  to 
a])preciate  and  act  on  the  fact  that  foreign  trade  consists  in  huy- 
ing  as  much  as  vou  .sell.  .\s  a  nation  we  seem  to  glorv  in  the 
idea  of  a  sale,  and  shudder  at  the  idea  of  a  purchase — which 
really  gives  us  something. 

'  Gilbert  H.  .Montague,  op.  cit. 


CHAPTER  V 
Government  Aid  to  Shipping 

Tin:  l'\i\i;i(s.\i.iTV  oj.  (.ovi  knmknt  Aid  td  Siiici'i.\n 

It  -carccly  iimls  arjjimu-m  u<  show  tliat  tlic  cn>t  nf  carriape 
■  if  uiiaii  irei^jln  varii-^  in  .littcreiit  omntricv     Rate-  <>i  \\:v^vi 
•litYcr,  costs  .,1  l.nil.liiijr  the  ,>lii,,  .IjftVr.  o.sts  .,t  foo.l.  oal  alid 
sui.i.lic>  (litUT.   tlicreforc   the  cnMs  of  riimiinR   thj  complctcl 
ship  imist  also  diCuT.     li"  shipowners  and  hnsines>  men  were  let 
entirely  alone  li\    fjovernineiit-.   we   would  have  neariv   all   the 
w.irld's  carrying  d.ine  hy  a  few  peoples,  and  most  nations  wnild 
lie  uitliont  a  first  class  ship.     Now  add  to  this  situation  the  fact 
that  a  nation  witli.iut  ships  may  find  itself  at  the  mercv  <,{  for- 
ciKuer.v  and  ue  see  the  cause  for  worldwide  effort  ;it  encoura-- 
'"K  shipping,     in  this  attempt  at  >ome  de-ree  of  maritime  in- 
dependence, temjiorarx    or  i)ermanent.  many  devices  have  heen 
tried.     I.ver\  nation  of  iinp.irtance  has  done  somethin-,'.     Uefore 
we  can  consider  a  postwar  ^hippin-,r  policy,  hefore  we  examine 
the  >hippiiij;  p,,licy  durinj;  the  war,  we  should  review  the  leading 
fact-  and  principles  of  government  aid  to  shipping  tliat  were  in 
fr.rce.  hcf..re  the  war  made  it  necessary  f(jr  the  nations  to  take 
ctmtn  1 ,  f  .shippinjr  and  virtually  make  it  a  service,  indeed  an  arm 
of  the  iTovernmcnt. 

Tu  ,t;et  to<,H'tlier  complete  information  on  this  wide  reaching 
.sniiicct  i-  of  itself  a  lengthy  investij,'ation,  and  we  are  fortunate 
m  that  it  ha-  recently  heen  done  in  a  thorou-jh  manner  hy  Mr. 
Grosvenor  M.  Jones.  Commercial  .\fjent  in  the  U.  .^.  (depart- 
ment of  Commerce,  and  puhlished  as  Xo,  ll'.i,  Special  .\f,'ent 
Seric-.  Department  of  Commerce,  Ikireau  of  Forei,i,'n  and  Uo- 
iiiestic  Commerce,  (iovcrnment  Printinjj  Office,  Washington, 
T-'lii.  Owing  to  its  recent  date  and  .satisfactory  character  the 
material  in  this  chapter  is  very  largely  abstracted  and  e.\  .erpted 

:j1 


tii>\  t.k\Mr..\r  .\ii>  111  siiii'i'iM, 


1: 


friitii  Mr.  Jmic^"  npurt  tn  which  I  vvi^h  hi-rc  tu  Kive  all  possible 
trcilit. 

Definition  t  k  TtKMs 

In  t'lis  chapter'  "  suhsidy  "  .iml  "imimty"  arc  catcd  as 
iiniuniiiiis  terms  and  arc  iiscd  to  describe  grants  that  arc  made 
\.  'lout  any  reipiircmcnt  of  special  service  to  the  ({Dvernmcnt. 
'I'lu'  term  "  suhvciition."  on  the  other  hand,  is  nscd  to  descrihc 
f;rants  that  arc  conditioned  npon  the  performance  by  the  jjrantce 
of  certain  prcscribe<l  services  for  the  state,  such  as  the  rapid 
trans])ortation  of  mails  on  rcfjular  schedules  and  the  construc- 
tion of  merchant  shijjs  according  to  plans  of  the  naval  authorities 
for  use  as  auxiliary  cruisers  and  transports  in  time  uf  war. 

For. MS   OF   (ioVKKNMl  NT    A  III 

State  aid  to  merchant  shippin>;  may  take  a  number  of  forms. 
In  the  commonly  accepted  version  of  the  term  goverinnent  aid 
means  the  payment  of  bounties,  subsidies,  or  subventions,  but 
its  scope  is.  in  fact,  much  broader,  since  substantial  assistance 
is  often  rendered  by  the  fjrant  of  |)rivile}(es  whose  benetiis  can 
not  be  computed  in  terms  of  money. 

liovernmeiit  aid  is  here  treated  under  two  broad  heads,  namelv 
direct  and  indirect  aid.  Under  the  head  of  indirect  aid  are  con- 
siderci'  sa)  reservation  of  coastins;  trade;  (b)  exemption  from 
import  duties  on  shipbuildinj^  materials:  (c)  admission  of  for- 
eign builf  vessels  to  natiijnal  registry;  (d)  preferential  railway 
rates;  (e)  h)ans  to  shipowners;  ( f )  reimbursement  of  port  dues, 
etc.;  (g)  reimburseinent  of  canal  dues,  and  (h)  other  indirect 
aid.  such  as  exemption  from  taxation,  etc.  Under  the  head  of 
direct  aid  are  (a)  postal  .subventions;  (b)  Ijounties  or  subsiJies, 
and  (c)  subventions  to  foreign  steamship  lines. 

Indirect  Aid 

(a)    Rcscrz'atioij  of  Coast iiuj  Trade. 

In  the  case  of  many  countries  the  extent  of   the  coasting 

trade  is  so  limited  that  its  monopolization  by  ships  tlying  the 

'  Whi'  the  present  tense  is  used  in  this  chapter  it  refers  in  many  cases 
to  conditions  that  prevailed  before  the  war  suspended  them. 


!  21) 


iMt.i  iNci:  (II    rill    i.Mi  \r  w  \w  i  ms   -iiiitim; 


iKiih  i,.il    il.i;,'    i.    ni    cniiiiiarativi'ly    littU-    .i<lv.iiita;,H-    |m    iticli 
-liip|iiii-        ( »|'    the    li-ailiin;   niariiimi-   I'Mimirii-   •  irfat    Dr'taiii 
I-  ■!i-tiii,i;tii>Iii-.l  In   tlK'  lail  llial  tin-  i-xtfii-ivf  i'..a>tiii,i,'  tra.k'  ni 
(111-  llriti-li   l-|,«  ati,l  ilu.  .,.-i-alli-,|  ittipcrial  cia-tiiij,'  trade   ( tlu- 
trade  1.1'tuiTii  tiK-  iiintliiT  omntr>  and  tin-  i-mIohu'^  and  iK-twirn 
tile  oil. lines  tluiiiselve,  t  have  lioin  ..pi-ii  fi  the  ■.lii|i>.  i.|  all  iia- 
tiiiN  >i!ui-  alioiit   l-.Mi,  ulu-ii  ihc  iiavi^'atimi  acts  uiTc  re|iealed. 
Ill  ri'iTiii  \i'ar~.  Ii..\\c\it.  oniMdiratinii  has  |,eeti  ;;iuii  !.■  a  pni- 
I'l-.-il  that   the   llritisli  and   iiiiperial  ONi-tin-  trade  l,e  el..>ed   t-i 
diip.  uf  iiati.iii^  deiiNiii;;  Kriiish  ,lnp-  rpiipn.val  privih-e«  and  In 
>«ilisidi/i-d  f'.ireinii  ^hip>,  exa-pt  iipmi  paMueiit  ni  an  indetiiiiity,' 
The  oia-tiii;;  trade-  <>i  N'.iruay  and  Sweden  are  upeii  in  the 
•<!n|is  nf  all  ..iher  nation,  eseept   Suedeii  and   N-iruav,  re-pee- 
tneh.      The  enastitij;  trade  uf   Denmark  is  open  withnui  (piali- 
iicatinii.      The  oniti-iiratinii  ,,t  the  oia>t>  ui  tlu-.e  o.iintrie-  and 
their  sparse  pnpnlatii.n  make  their  o.asiinj,'  trade  nf  little  vain, 
m  the  develnpmeiil  nt  a  merchant  marine.     In   tact,  I.nili   Nnr- 
way  and  Sweden  tind  it  necessary  tn  sulisidize  a  mimlier  ni  cnast- 
wise  lines  t(i  insure  regular  trade  and  mail  cnmimmicalmns. 

The  niastinjr  trade  nf  (iermaii\.  while  imt  imimrtant.  is  larjjely 
held  In  (lerman  ships,  I.nt  this  is  imt  a  result  nf  le},Mslatinn,  since 
nominally,  the  cnastino;  trade  of  ( lermany  is  open  f.  the  ships 
of  nth-.-r  iiaii.ins  that  j;rant  recijimcal  privile^jes  tn  ( ierman 
ships. 

iJoth  the  meagre  cnastiiij;  tr  u  nf  the  .Vetherlands  prnper  and 
the  extensive  trade  hetween  ;he  .Velh.rlands  and  the  Dutch  hlast 
Indies  are  npen  tn  the  ships  ,,{  naiiniis  that  i,'rant  recipmcal 
privile<,'es  to  Dutch  ships. 

The  I'liiled  States.  I'Vance.  Italy.  Austria-I  luiii^ary.  Spain, 
and  llel^ium.  ammifr  the  more  imixirtaiit  maritime  countries,  have 
Inn-  reserved  their  cnastin-  trade  to  national  shijis,  while  lapan 
lias  reserved  all  of  its  coastin-j  trade  to  its  own  shii.s  ..nlv' since 
!ltlO, 

i\u-sia   has   long   reserved   the   trade   hetween    Russian   ports 


<,o\  I  HNMI  N  r     Mil     f"    >IIII'I'IN"; 


127 


•  it>  the  •«;itiK'  M-a  i'<T  l\'ii«>tim  ^\\\\f^.  Imt  it  ua>  iKt  iiiili!  tlu-  i-^ii- 
iiiiii-  Ml  ilic  r"\al  tliiTif  iif  Max  J'.'.  l^iiT,  tliat  tlti-  tradf  livtwceii 
nil  l\ii'.»iaii  |M.ri>  v\a»  ic^iriitcil  in  Un^siaii  -h\\)>. 


ih)  l..wuifti>>n  from  /iiif^i>rt  l>iiti,:i  on  .sliifihiiiliiiiiii  Materials. 

All  ^liiiiliitildiii^  inatcriaN  Iiavi-  U-i'ii  fxt'iupt  trnni  cu'^toms 
<liitii-s  ill  I'.iitiland  ^iiuT  tin-  atlii|)tinti  >>i  tin-  tree  traik-  policv. 
Stiili  mati-rials  have  Ikh-u  cxtinpt  I'nr  maiiv  \car>  al^n  in  ^\vr- 
niany  ami  tlic  .\itluTlaii(l>.  I'.ol^'ium  ha»  Kraiitcd  irct-  a<inii«- 
sidii  tn  »hi|il)iiiliim;,'  luattTials  since  April  \1,  l'>t',j.  All  >hip- 
liiiijilitij,'  material-  have  luen  mi  the  iree  li-t  in  the  I'liited  States 
-iiiee  the  tariff  act  ni  I'.MHt.  althini;;h  many  >ncl)  naterials  had 
lieeii  exempt  frmn  diitie-  -'nee  me  lariiT  act  ni  I "»!>(. 

I  ranee.  Italy  and  Sjiain  levy  duties  on  materials  used  in  the 
ennstructiim,  repair  and  eciuipment  nf  stii|)s,  despite  the  fact 
that  their  iron  and  steel  industries  can  not  under  present  condi- 
tions compete  with  those  of  (ireat  liritain  and  (iermanv.  and 
many  products  of  these  industries  must  he  imported.  Ihcse 
countries  wish,  however,  to  protect  ilomestic  industries,  even 
thouj;h  they  must  pay  bounties  to  shipluiilders  to  otTset  the 
duties.  The  tact  tliat  these  countries  levy  import  duties  on  ship- 
huildinjj  materials  must  he  Itorne  in  mind  when  reference  is 
made  to  the  fact  that  they  pay  Innuities  on  ship  construction. 

The  Scandinavian  countries  impose  import  tiuties  on  ship- 
liuildiiiK  materials  hut  fjet  around  the  difficulty  in  another  way 
hy  allowinj;  drawbacks.  Sweden  allows  a  vlrawhack  of  duties 
.-ictually  paid  on  materials  used  in  the  construction  in  Swedish 
yards  of  any  ship  of  4ii  tons  and  over.  Denmark  allows  a  draw- 
hack  equal  to  not  more  than  :.'  per  cent  of  the  sellinj;  price  of 
all  shi])s  Ijuilt  in  Danish  yards.  And  Norway  makes  in  lieu  of 
a  drawback  a  fjrant  amnuntinp  to  1  per  cent  of  the  .sellinfj  price 
of  new  steamers  of  more  than  oOd  jrross  tons  and  to  1  per  cent 
on  new  steamers  of  .")0  to  :!(Mi  tons  and  sailiufj  vessels  of  .")0  tuns 
and  over,  as  well  as  a  grant  etiual  to  1.5  per  cent  of  the  cost  of 
repairs  on  vessels  of  .'too  tons  and  over,  if  the  cost  is  at  least 
l.tMM*  kroner  ($iMi.s). 


I'.''>        isii.iisii    ,>y   nil    i;kk\t  war  i  ihn   ?.iiiii'tsi; 

(ft  Admisium  ,<f  l=,<r,iiin  lUiill  I  ,:is,-h  to  X,iii,>iiitl  l\',,/iMr\: 
l"«ir  iiiaiiv  u';ir>  iim  inuiitr\  m|  imrinrtaticc  with  tlu'  isivpti.in 
•  if  thf  Initi"!  Sinic-  lia^  rci(iiiriil  tliat  'liiif.  thiiiy;  tin-  nalmn.il 
(lajf  -hall  Ik'  "ii  il'iiu"*lic  i'i>ii»lriictinii.  alllKni^'li  praciiialh  cvcrv 
O'lintn  iia-  mailr  tl>i'<  rtiinin-nuiit  in  the  ca»c  ni  ■■iiaiii-hiii^ 
nrciviii;,'  p. i^tal   Niil.vi'iiiinnt, 

l'ii;;laiiil  ha--  «raiiti>l  nuixtirv  t.>  turiMKii  Imilt  *hip«.  in  ..tlier 
wnfiN.  has  pnr«.Ufil  the  '"  trif  ^hip  "  pili  \  «ince  alK»ut  f  »."■•»  At 
that  litiif  woollen  ^aihiij;  ve>>el>  were  pre<l>iniinaiit  ami  ihe«e 
eniiM  liv  seeiireij  innre  cheaplx  in  the  liuled  State-,  uhieh  lia'l 
larj^er  Mipplie-  of  tiniUr  aiiil  naval  -tnre«  ami  a  more  etticiem 
-hi|il.nil<liiij,'  imhi-tn.  As  a  result  ni  thi-  tree  ship  pnliey  the 
Mil  reliant  niarine  of  (ireat  i'ritain  reeeived  larj;e  accession, 
(Inrinu  tlie  t  ivil  War,  when  more  tlian  7'><»,imh»  tons  of  American 
-liippin;,'  >eeiire<l  I'oreinn  registers  to  avoid  capture  or  de-truc- 
titm  liy  Southern  raiders. 

(iermanv  has  aUo  jiursued  the  tree  ship  iMilicy.  hut  at  the 
-ame  time  ha-  ^jiveii  inueh  encoura);ement  to  the  domestic  pro- 
liuetiiiii  of  sliiiis  hy  makinjj  low  railroad  rates  on  materials 
transported  tr.ni  the  iron  and  steel  manufacturinj;  centers  in 
the  interior  to  the  shipyards  along  the  coast  and  l>y  reiinirini; 
that  suhventioneil  -teainers  should  he  of  doniostic  con-lrnetinn. 

The  I'liited  State-  has  adopted  the  frei  ship  policy  in  full 
only  since  the  outhreak  of  the  present  war  in  Kurope  and  onh 
in  respect  to  ship-  en;,'ai;ed  in  the  oversea-  trade.  However,  a 
step  in  this  direction  was  taken  in  the  Panama  Canal  act  of 
.\n!j;n-t  .'1.  r.M_'.  which  admitte<l  to  .\merican  registry  sea- 
worthy lorei^Mi  limit  -hips  not  ni<.re  than  live  years  old.  The 
policv  iiur-ued  hy  the  L'nited  States  from  ITl*-'  dmvn  to  I'.tll  of 
granting  registers  only  to  .\merican  huilt  ships  resulted  from 
a  de-ire  t  >  foster  the  domestic  shipbuilding  industry.  There  is 
no  (|uestion  that  this  policy  has  heen  of  some  assistance  in  main- 
taining tile  industry,  for  there  has  heen  a  large  ami  growing 
demand  for  ships  for  the  coastwise  trade  which  is  restricted  to 
.\mericaii  luiilt  .ships  and  has  developed  rapidly.  If.  however, 
the  shipbuilding  industry  of  the  L'nited  States  had  heen  obliged 


•  I'lVKHNMI  sr     \U>   T(»    !«lliri'l\ii 


\2<> 


f  <lep«'tnl  tipi.n  "iriliT.  fi.r  •'\i\\>%  in  thr  ovrr*ra'*  traile.  it  w-niM 
luivi-  iUtIiiu'I  luti;;  -ittcf  ItccaiKc  <if  the  liij;luT  cinto  ui  Anu-ri- 
rati  «lii()  cnti*trmiiiiii  It,  tlierff>ire,  ap|)tMr^  that  \\f  have  had 
littU'  yaiii  tri>n)  <nn  jxiHcy  <>f  rxcluoi'm  nf  lUrtiKii  Imilt  ve***:!"* 
for  nvcrsra"*  traik-. 

OiH'  <if  the  ■.tr'Hi^e^t  arniiiiient'*  afain't  .arii)ii<t  hiiI -ith  hill* 
that  have  l>een  prnpmfd  in  the  pa«t  twenty  ye:ir»  ha>  heeii  the  fart 
tli:it  the  'lib  priiviilcil  I'ur  navi^'atjun  lK>tintie<>  that  wouhl  have 
I'ciii  !■>  a  Iari,'e  <lei;rfe  hmititie-*  nii  iiiti>tnicti<>ii,  liiice  lliev  were 
iiiteiiiU'tl  til  iiif^ct  the  hi^luT  <lepreciati'iii  and  interest  ehar^i"* 
tif  the  higher  priieil  Atrerieati  Imilt  -ihip*.  a^*  well  a*  the  hiKlier 
<'peratiit)^  rost>.  Sue!)  Iei;i«latiiiti  appeared,  therefure,  to  j;rant 
an  artiticial  and  unwarranted  otinuilu-  tn  the  omstructiun  of 
<iversca«t  nhips  atxl  to  have  Iieen  prepared  in  the  interest  of  the 
>hipliii' ler  rather  than  in  tlie  intercut  of  the  shiiM)wtu*r  or  of 
the  esiHirter. 


((/)    I'rt-ft-n'iitii-l  A'<(i7r»<;v   Rata. 

A«isi>*tancc  in  the  form  of  lower  rail  rate*  on  Roods  shipped 
over  speeified  steamship  lines  is  a  practice  that  has  k-en  followed 
in  ( icrmany  with  res|)ect  to  the  (iernian  Levant  and  the  (ierman 
l-.ast  Africa  I.ii\es  since  the  year«  IM'O  and  1  »'•».">,  resjjectively. 
'Ilicse  differentials  have  a  double  pur|)ose.  since  liy  enaliliiifj 
•  jerman  manufacturers  to  >ell  their  products  at  lower  prices 
in  the  countries  reached  hy  the-e  line-  they  develop  Ciernian 
trade  and  at  the  same  time  increase  the  trafHc  on  the  preferred 
steamship  lines. 

France,  like  Ciermaiiy.  has  ma<le  use  of  ditTerential  export 
railrt;ad  rates  to  assist  in  the  development  of  trattic  on  certain 
French  steamship  lines,  as  well  as  to  protnote  the  foreign  trade 
of  France.  The  I'nited  States  vice  consul  at  Havre  reported 
in  I'.H:!,  that  the  Orleans  Railway  gives  reduced  rates  on  goods 
-shipped  to  French  West  .\frica  aiul  to  South  .America,  and  a 
special  reduction  of  20  per  cent  on  goods  shipped  to  Newhaven. 
Fngtand,  from  St,  .\azaire  hy  vessels  of  the  CoinfUi/nii-  Ciu'rolc 
Tnmsatlantiquc:  that  the  Western  Railway  makes  a  special  rate 


I  !0 


I  M  I  M   Si  t     ("I      III;      l,Ml    \  I      \\    \N     I    loS     »ll  IfflNi; 


/■,)./»((,' <„»).r,)/.'  I  uiHittlhinliiiiw :  .\\u\  ii.tt  tlic  r.iri.|.viiii.-\U'i|i- 
ti-rr:iiuatr  U.iiK^.iv  m.ikf«  »|k-i'i.i1  rali'^  h'r  ;;'i. .<|-  ^tii|i|K-il  Im  tin- 
l.ivaiil  .11). I  llu-  I  iir  la  I  li\   »|Kritu'l  rntuli  lii>r« 

I'm. ill  <irtman\  ami  I  rami'  li.tvi-  ;i  j;<'iHTal  "<•  ^tiiii  m|  i\|M.rt 
rail  ralC'.  .i-  vxcll  a^  a  '[nvial  yv-lcm  nl  r.Tti--«  li.r  ^jimkI*  tarru'il 
l.\  ■.fii'i  itinl  iii-ani^liiii  Itiii's  I'ln'  ^itiiTal  ^;,  «t«iti  !»  t'>  I*'  tiiiiiul 
al«'  m  i!ii-  rniti-.l  Si.iii-».  N'ofwa^,  Swi'ilcti,  iKiiiiiirk.  lUI'^iiiin, 
liu'  Ni'ilu-rlaiKU  aiiil  Spam  In  ilif  I  nin-d  Si.iir-  ii  U  ti.it  :i 
-|>frial  --tiiuuli'-  to  «lti|'i>!iij,'  i  \cc}it  that  it  am>iiitii»  X<>  a  '•"tin* 
|>\  till'  raiU\a>  Ui  all  cxjmrt  nt  iiilainl  j{i«h!»  taken  t"  |><>rt  h\  rail. 


Tlu"  |ni|if\    lit    uraiitiiiir   Inati-.  in   shi]iiiuiuT-  at    |i  v\    ratr>  of 
iiitfri'»t  nt  uitli^tit  iiiiiTi-i  ua»  Ih-hiiii.  it  i-  !ulu\ril,  li\     Xii^tria. 

\  f'liiirail  111  II U-  .'11  ItiK  2''.  l""'.'!.  !n.-'\  nii  tin  \ii«.iriaii  <i>is- 
I  rimuiit  aiiil  tlii'  Xii^triaii  I.lnvil  Sli  ,iin»hi|i  '  ■>  prnviiU'il  that 
till-  lattrr  >hMiiltl  nvi'ivf  a  i;ii\iTnnu'iil  Inaii  "\  I.Mmi.ihih  il..riii'» 
1  ,*i;iili,ii(iii  I  |,.r  till'  iiii-tnutiuii  nt  iirw  •.ifaiinr-.,  i!tf  ^anu-  tn 
I'C  avaiialiU-  in  thru-  i-i|iial  aiiinitni*  ami  •••  tn-  rfpaui  without 
iiitiTc>t  in  live  ycarlx  in^taliiu'iit«,  lifKinninu  January  :.',  I!M»-.'. 

'I'hf  niily  in-tatiCf  nt  a  Inan  In  a  s|fain-.hi]i  i-iini|ian\  lis  the 
I'riti^li  (invfrnnifiit  \va-  tin  Inan  iiiaijc  in  the  »  iiiiaril  Steamship 
•  n  nniliT  tlif  mail  ami  nlmtralty  -vih  vent  inn  n.ntract  ni  litn;;, 
rmliT  tin-  cmitracl  the  l!riti«h  <  Invfrnnu'iii  !•  .iiu'd  the  sieani- 
-hip  intnpany  ti'.'i'H'.iHiu  i  i!<1J,i;;.:.',!m»<i  )  f, .r  ilie  lutiUliti^  nt  twit 
-tcanuT-  I  the  l.ii.<i!.tiiii  and  the  M  ■ir.'.niiii)  that  »hnii!il 
lie  latter  tliiii  aii\  iilnai  ami  siiitaMe  inr  ilit  n-c  ni  the 
Ailiniralty.  Ihe  Inan  was  made  at  tlu  rate  nt  j-',  per  leiit, 
wliich  is  aliniit  J  pvr  cent  Inwer  than  the  rate  at  which  tlu-  cnin- 
pany  cniild  liaxe  Imrmwed  a  similar  amnimt  in  the  npeti  market 
Keprescntaiuts  nf  t!ie  Coinpanv    have  stniitty  averreil  thit   the 

xtra  cnst  nt  the  »liip,  and  their  nperitinii  <|iiite  ntTset  the  ad- 
vaiita);>-,  'Ihe  ciMinnient  has  imw  had  \ears  ni  war  ■•'rviif 
li\    the  .Mitiirrtiiniii. 

Since  the  Uf^inninj;  ni   the  present  }ear  the  hreiich  (invetii- 


t.'iN  I  MS  \|r  SI      »lti    IM    >llll'l'l\i. 


lU 


imiil  ha>  i'>ii'ulcr«<l  a  |il.ii)  !■.  iiurciH-  the  Ircmh  iii«rih.int  ma- 
rinr  by  |)ri>vt<liii(;  i»r  Kovcrnnient  l<>an«  l<>  «hi|il»t»il<lmi{  nttrr- 
I  riM*  A  hill  |irrM:tili-<l  l<>  I'artiaimut  mi  jnritiar>  M.  It'lti. 
.uiihi>ri/t'<l  ail  ;ip|>r  •prtati'M  ui  |<m(,imhi,ihm»  iraiu*  ( >!'l!».;!tM»,. 
«MMi)  ti.  Ik"  iiM'il  III  milking  l-iaii'  <liirii)K  tin-  war  ami  i-ir  a  iktiihI 
111  I.'  iM-iiilh*  rluriai'trr  Thf  lull  |iMvitli-<>  that  iht  iiii«t«'»i  tin 
iIhm-  I-.at)«  «luitilil  In-  lali-iilaidl  at  ilir  rait".  iliarj,'«i|  !tv  ilu-  hank 
«ii  Ir.iiu'f  l'>r  l'>an»  ^ti  »iciiriiir»,  aii<l  thai  iliv  |..aii  »IimiiI.|  imt 
r\ni.l  'o  |nr  ciiit  tti  tlu'  |iiirctia>f  pru-f  uf  vctM^h  iNatKht  !•>• 
■.ii.itii^litp  i'  tiipatiio  haviii>;  a  flci't  <it  .'onou  i,,|(,  ,,r  ,,v«rr  aiul 
"••  pvr  iini  III  ilie  niM-  <>i  initipaiiic^  liaviiij;  -.mailer  tkct-. 

</l   h'tinibiir.s,  iiinit  .>/  f\irt  IUi,:i.  etc. 

iHiirn;  "I  lioinitiin  arc  the  inily  im|M)rtaiit  luiintricx  tliat 

liavi-  i\ii..  Ill  til  shipping'  l)\  j;raniiiij;  cM-mptioii'*  trom,  nr 

iiiakint;  riMmlitir^iiiifiit  <ii.  p.irt  iliic>, 

I'l  r  many  \tar-.  prinr  tn  the  war  in  latrnpe,  ISfl^imn  rcitii- 
I'ursfii  the  North  Oermaii  LIumI.  the  K">i)ii>>  l.iiii-,  am!  the 
riiiieil  Steamship  C  umpaiiy  <it  t  i ipeiih.iKen  iMr  all  pilutaKe  Ices, 
jmrt  liie*.  eti-..  paiil  to  MclKian  ami  Dutch  ntVicial-.  in  i,'ctti:i^  tt> 
lU'lKJan  fMirt".. 

t'/)  h'l'iiiibiirsi-iiii-iit  i<f  Canal  Piict 

The  |H.|io  ..(■  1,'raiiiiiiK  imlirei-t  aid  to  shijipiiif;  hv  reimlmrse- 
tneiit  lit  laiial  iliies  wa-  in-titiiteil  liy  Ru»>ia  in  l»7i».  This 
praeiice  ha-  lieeti  eMeminl  tn m  time  to  time  and  m  \\  provide-, 
for  the  reitnl.nr>enKiii  of  the  full  amoniif  •"  tiie  canal  dues  (aid 
hy  Russian  -teamcr*  Ixiund  for  or  sailing'  -m  any  Kussjnn  port 
in  the  l"ar  I'ast.  and  for  a  reitnliursenunt  of  two-tliirds  of  the 
full  dues  paid  liy  Russian  -teamers  Imnnd  for  or  saiiiui;  from 
port-  ..n  the  Indian  Ocean  and  non-Rn— ian  ports  on  the  I'ac  'ic 
Oicai).  In  the  period  fnmi  ls7!»  to  H'tM;  tht  Russian  (ioverii- 
meiit  expended  a|iproxiniateIy  i?l.  |0(».(mhi  in  reimhnrsemcnt  of 
Suez  ("an.-d  due-. 

The  \n-trian  (1(  veriimetit  makes  a  reimhursement  of  Suez 
(anal  dues  paid  liy  the  steamers  of  tlu     .u-trian  IJovd.     This 


riUi 


i:]2       iNi-i.iKNCi:  OK   riir.  <;RE.\r  war  ipon  siiippisr. 

policy  is  Relieved  to  have  been  iiistitiUiMl  uiiilcr  tlic  mail  suhvcn- 
ti.m  contract  «i  Inlv  l'.'..  l^.tl.  The  l)Ciietits  cnnlerre.l  hy  this 
form  oi  indirect  ai.l  may  lie  ^een  from  the  fact  that  in  the  i-eruul 
from  r.»"l  to  I'.MO  the  amounts  paid  annnally  to  the  Austrian 
Lloyd  Steam::iip  Conijiany  in  reimhursement  of  canal  dues 
ranged  from  $:!'.i:...-.>:.  to  $4!»J,.'.it<t. 

The  policv  ni  makinj:  reimbursement  of  Suez  Canal  dues  paid 
In  French  steamships  was  instituted  in  the  contract  made  on 
December  :lt>.  lUH.  with  the  Compagiiic  dcs  Mcssaycrics  Mari- 
tiincs. 

(/i)  Exemption  from  Taxation. 

This  form  of  indirect  aid  has.  so  far  as  can  he  ascertained, 
been  granted  onlv  in  the  KinRdoms  of  Austria  and  Hungary. 
The  i)ractice  was  first  introduced  in  Austria  in  the  law  of  June 
18,  IMio.  which  granted  an  exemption  from  income  and  trade 
taxes  on  all  iron  or  steel  vessels  engaged  in  ocean  voyages. 

The  laws  of  the  State  of  New  York  exempt  from  all  taxation 
for  State  and  local  purposes  all  American  owned  ships  registered 
at  anv  port  in  the  State  if  engage.l  in  the  foreign  trade  of  the 
I'nited  States.  Corporations  owning  such  ships  are  exempt  untd 
December  :!1,  V.^li,  from  all  taxation  upon  their  capital  stock, 
franchises  and  earnings. 

Alabama  exempts  ships  engaged  in  foreign  commerce  trom 
taxation,  while  the  State  of  Washington  exempts  all  ships,  built 
or  in  process  of  construction,  in  the  coastwise  as  well  as  in  the 
foreign  trade  of  the  United  States. 


Direct  Aid 

(rt)  Postal  Subventions. 

The  granting  of  postal  subventions  to  steamship  lines  ante- 
dates th^e  bonntv  or  subsidy  system  and  is  in  more  general  use 
throughout  the'  world.  The  leading  maritime  naticm  of  the 
world.  (;reat  P.ritain.  was  probably  the  first  to  adopt  the  policy 
of  paving    ubventions  for  the  transportation  of  mail,  the  first 


r.OVERXMEXT    AID    TO    SIlirpIM', 


i;j;{ 


cniitraot  of  this  character  beiriR  the  contract  made  in  1s:$S  with 
the  Peninsular  Company  for  the  transportation  of  mails  Iwtween 
EnKland.  Spain  and  Portugal.  Aluiut  this  period  also  the  first 
contracts  with  the  Cnnard  Line,  the  Royal  Mail  Steam  F'ackct 
Co.,  and  the  Pacific  Steam  XaviRation  Co.  were  entered  into. 

The  United  States  and  I'rance  soon  followed  the  e.xample  of 
Great  Hritain.  The  fir>t  United  States  contracts  were  made  in 
1S47,  and  were  with  the  Ocean  Steam  Navigation  Co.  for  serv- 
ice hetween  New  \'ork  and  Hremen  and  Xew  York  and  Havre, 
and  with  i:.  K.  Collins  f(jr  a  service  between  Xew  York  and  Liv- 
erpool. The  first  formal  mail  contract  made  by  the  French  Gov- 
ernment was  in  1S.51.  and  was  with  the  Compagnic  Gcncralc 
Transathnitiijuc. 

Germany  did  not  adopt  the  policy  of  paying  postal  subven- 
tions until  l.ssii,  when  a  contract  with  the  North  German  Lloyd 
was  concluded.  At  the  i)resent  time  the  payment  of  postal  sub- 
ventions is  the  only  form  of  direct  financial  assistance  that  has 
been  maintained  by  the  German  Government. 

The  purpose  of  mail  subvention  contracts  is  primarily  to  en- 
courage the  maintenance  of  fast  mail  services  on  regular  routes 
and  schedules.  In  many  instances  a  motive  of  almost  equal 
weight  is  that  of  maintaining  the  fastest  possible  communica- 
tion between  the  mother  country  and  her  colonies.  Incidentally 
a  third  object  is  commonly  achieved,  namely,  that  of  providing 
vessels  suitable  for  auxiliary  cruisers  and  transports  in  time  of 
war,  and,  in  many  cases,  a  fourth  object,  namely,  that  of  foster- 
ing the  domestic  shipbuilding  industry  by  reciuiring  that  the  sub- 
ventions shall  i)e  paid  only  to  domestic  built  ships. 

In  many  cases  the  financial  aid  granted  by  the  mail  contracts 
may  Ik;  thought  to  be  in  excess  of  the  cost  of  the  service  actually 
rendered,  but  it  should  be  remembered  (1)  that  subventioned 
ships  are  required  to  operate  at  fast  speed,  which  is  dispropor- 
tionately more  expensive  than  operation  at  moderate  speed;  (2) 
that  the  operation  of  vessels  on  fixed  routes  and  on  fixed 
schedules  often  prevents  the  vessels  from  receiving  full  cargo 
and  precludes  a  change  (jf  route  to  suit  the  changing  conditions 


i;;i 


iNii.ri.Nii:  OF  Tin:  cruat  wak  ii-on  siiiimmn.. 


..1  trade :  aii.l  ( :i)  tluit  nv.st  of  the  mail  steamers  arc  c..ii>tructcil 
an.l  c<iuipi.c.l  in  a  >i)ccial  manner  to  fit  them  idr  ii>l-  as  auxiliary 
cruisers  ami  transports  in  time  of  war  ami  arc  sul.jcct  to  the  call 
of  the  naval  authorities  on  short  notice. 

The  orij,'inal  ^,'rants  made  to  the  Ciniard  Line  liy  the  I'.ritish 
Covernmcnt  were  lar^'e  ami  prol.al.ly  contained  a  lar«e  element 
of  hounty.  At  that  time  l". upland  and  the  United  States  were 
keen  rivals  for  supremacy  on  the  seas,  particularly  in  the  trans- 
atlantic trade.  The  steamship  was  then  lar-,'ely  an  experiment 
and  the  ojjeration  of  steamships  was  "an  infant  industry 
which  rei|uire<l  protection.  The  purpose  of  the  larf;e  jjrants 
made  hv  the  I'.ritish  ("lovernment  was  not,  however,  merely  to 
assist  in  the  establishment  of  a  steamship  line  for  the  line's  sake, 
hut  more  particularly  to  promote  rapid  communications  between 
l".n,L;land  and  her  .\merican  and  Australian  possessions.  This 
motive  is  clearly  seen  in  the  fact  that  the  (.riyinal  Cunard  con- 
tract <tii)ulated  that  a  call  should  be  made  at  Halifax  on  both  the 
,,utl..  uiid  and  the  return  voyages  and  that  a  connecting  line 
should  be  operated  between  Halifax  and  Uuebec. 

With  only  two  important  excepticms.  all  fmancial  aid  extended 
by  the  Hritish  (lovernment  has  been  in  the  form  of  l)o>tal  and 
.\dmiraltv  subventions.  The  first  important  exception  was  in 
tile  case  of  the  contract  made  with  the  Pacitic  Steam  .\avi^:ation 
Co.,  ill  l^-l".  grantiiij;  a  subsidy  for  the  operation  of  steamships 
aloiiL,'  the  west  coast  of  South  .America.  .\  more  recent  excep- 
tion is  to  be  fouml  in  the  subsidy  granted  the  l".lder-l)em ; 
Line  operating  between  Jamaica  and  l-.ngland,  the  pu' 
tliis  -uhsidy  being  to  enciairage  trade  in  the  .igriciiltv.ral  ;  >■  s 
of  Jamaica  which  was  then  in  a  condition  of  industrial  • 

■icn. 

riu-  Liiited  Slates  and  (iermany,  who^e  merchant  navies  rank 
next  in  importance  to  that  of  (ireat  I'.ritain,  have  likewise  ex- 
tende.l  tiiiancial  aid  to  shijiping  only  in  the  form  of  mail  sub- 
ventions. The  United  St:  "es  instituted  this  pulley  in  l>i7.  as 
stated  aliove,  and  lor  a  time  made  much  more  liber.al  jiaxments 
than  the  I'.ritisli  (iovernment,  but  in  spite  of  the  greater  aid  the 


OOVERXMENT    AID    TO    SHIPPING 


1. •J.- 


American lines  <litl  not  prosper.  In  the  case  of  the  Collins  Line, 
which  received  most  generous  aid  for  about  10  years,  the  terms 
of  the  contract  were  probably  too  exacting  to  ])erniit  of  the  suc- 
cessful operation  (jf  its  vessels  from  a  purely  commercial  stand- 
point, the  requirements  as  to  speed  and  frequency  of  sailings 
being  such  as  to  prevent  these  ships  from  securing  a  satisfactory 
amount  of  cargc  In  the  opinion  of  many,  some  of  these  lines 
might  have  b«cn  successful  if  the  subventions  had  not  been  with- 
drawn in  toto.  The  United  States  did  not.  however,  pursue 
the  policy  of  mail  subventions  continuously  until  the  passage  of 
the  mail  sul)si(ly  act  of  March  :i.  l^'Jl,  which  is  still  in  force. 

Germany  instituted  the  policy  of  mail  subventions  in  IS^O. 
when  a  contract  was  concluded  with  the  North  German  Lloyd 
for  service  to  the  I  ,ant  and  the  Far  East.  These  grants  are 
considered  by  many  as  having  been  made  as  much  for  the  ex- 
tension of  German  trade  and  intluenct  as  for  the  development 
of  German  shipping.  One  of  the  most  striking  fcaf  res  about 
the  whole  commercial  policy  of  Germany  is  the  fact  that  its 
commerce  and  shipping  have  been  so  effcctivelv  coordinated 
that  each  contributes  directly  to  the  development' of  the  other. 
The  only  other  mail  subvention  paid  by  the  German  Govern- 
ment has  Iwen  to  the  German  East  Africa  Line,  although  aid  of 
an  indirect  character.  namJy,  preferential  railwav  rates,  has 
been  gr.nnted  to  both  this  line  and  the  German  Levant  Line. 

The  largest  of  the  German  steamship  companies,  in  f.-ct.  one 
of  the  largest  in  the  world— the  Hamburg-American  Line— has 
received  comparatively  little  financial  assistance  from  the  Ger- 
man Government.  For  a  time  it  shared  with  the  North  Ger- 
man Lloyd  a  subvention  paid  for  the  carriage  of  mails  to  China 
and  Japan,  but  the  amounts  received  in  this  manner  were  small. 
It  is  interesting  to  observe  also  that  probaI)!y  the  most  re- 
munerative service  of  the  North  German  Lloyd  has  been  the 
-service  to  New  York,  and  that  the  amounts  received  bv  this  com- 
pany from  the  United  States  Government  for  the  transporta- 
tion of  United  States  mails  to  Europe  have  been  on  the  average 
about  one-fourth  as  large  as  the  subventions  which  this  com- 


i:!(5 


INH.IKNCK    (I     Tin:    r.REAT    WAK    II'ON    SIIIIMMNC. 


]iany  has  rccoivcd  from  the  (icrniaii  ('i.)vcrmiicnt  for  services  to 
Australia  ami  the  l-'ar  iiast. 

'ilic  suhventioiis  paid  In  the  Norwegian  Cinvertittietit,  whose 
imTchant  marine  ranks  fourth  amonj;  tlie  im-rchaiu  navies  of  the 
w.irid.  liave  been  ahuost  exclusively  for  the  maintenance  of  mail 
lines  along  the  ci  ast  of  Norway  on  routes  that  would  he  un- 
profitable without  financial  assistance  of  this  character. 

The  stnall  amounts  jiaid  in  mail  subventions  by  Sweden  and 
Demuark  arc  also  largely  of  this  character. 

The  French  Ciovernment  has  for  years  paid  liberal  mail  sul>- 
ventions  for  routes  to  the  United  States,  the  West  Indies,  South 
America,  the  west  coast  of  .\frica.  Corsica.  Australia.  China, 
and  Japan.  The  subventions  paid  t.-  these  lines  are  regarded  as 
having  contributed  more  to  the  maintenance  of  the  I'rench  mer- 
chant marine  than  the  large  sums  expended  in  bounties  and  sub- 
sidies since  issl. 

Japan  has  jiaid  subventions  for  the  transportation  of  mails 
practically  ever  since  that  country  adoi)ted  the  I'.uropean  type 
of  steamship.  The  original  grants  were  mainly  for  service  in 
the  Far  iuist,  but  in  recent  years  grants  have  been  made  for  serv- 
ices to  luirope  and  to  Xorth  and  South  .America. 

The  mail  sulnentions  paid  l)y  Italy,  the  Xetherlands.  Spain 
and  Portugal  have  had  for  their  object  in  most  cases  the  improve- 
ment of  cotumunication  between  the  mother  country  and  the 
ctilonies.  This  is  true  also  of  a  numlier  of  the  contracts  maile 
by  the  French  (lovcrnment  with  several  I'rench  ^teamsliii)  lines. 
I'avment,^  made  under  the  mail  sul)vention  contracts  between 
the  .\ustrian  Covernment  and  the  Austrian  Lloyd  Steamship 
Co.  mav  be  regarded  more  in  the  nature  of  subsidies  than  of 
subventions  since  the  grants  have  been  out  of  all  jjroportion  to 
the  anuiunt  of  postal  service  rendered.  In  other  words,  under 
the  guise  of  mail  subventions  the  .Austrian  Ciovernment  has  really 
paid  subsidies  whose  prime  purpose  has  been  to  promote  .Austrian 
tratle  and  shipi)ing. 

The  Dominions  of  Canada  and  New  Zealand,  the  Cummon- 
wcalth  i'i  Australia,  and  the  Cninii  of  South  Africa  pay  large 


<;<>vi:rnmk\t  aid  to  siiii'imng 


i:!; 


am(  Hints  anmially  in  the  form  of  mail  subventions.  When  these 
.siiI)ventions  were  estalilished.  tlie  primary  ohjeet  was  to  pnimote 
faster  and  nvre  regular  eotnmuiiication  with  the  mother  coimtry. 
In  more  recent  years,  however,  the  commercial  motive  has  en- 
tered into  the  payment  of  these  grants.  This  motive  is  clearly 
shown,  for  exam|)le,  in  the  recent  contracts  of  the  Canadian 
(iovernment,  uhich  require  that  in  the  assignment  of  cargo 
s|)ace  preference  shall  he  given  to  Canadian  goods  and  Cana- 
dian shijjpers. 

I">om  the  outset  the  mail  subvention  contracts  have  been  ex- 
acting in  their  reciuiremeius  as  to  s|>eed,  sailing  time,  schedules, 
and  ports  of  call  and  in  the  matter  of  deductions  for  noncompli- 
ance with  contract  stipulations.  The  tendency  has  been  to  ex- 
tend the  requirements  until  today  the  ordinary  mail  subvention 
contract  gives  the  government  not  only  a  very  large  control  over 
the  comi)any's  afTaiis.  but  also  an  active  participation  in  its  de- 
liberations and  a  share  in  its  profits. 

( b  )    ftoinitics  or  Subsidies. 

General  bounties  or  subsidies  to  merchant  shipping  are  of  com- 
paratively recent  origin  if  an  exception  is  made  of  the  original 
grants  made  by  the  British  and  American  (lovernments  to  the 
lines  established  about  the  middle  of  the  last  century,  which 
were  at  the  outset  so  liberal  as  to  contain  a  large  element  of 
bounty  or  subsitly. 

The  system  of  paying  general  l;ounties  to  shipping  may  be 
said  to  have  Ijeen  instituted  by  France,  which  entered  upon  this 
policy  in  l.s,si,  and  has  made  a  more  extensive  use  of  bounties 
than  has  any  other  countr\-. 

The  first  subsidy  law  in  France,  that  of  January  20,  ISSl. 
was  adopted  after  careful  investigati<in  by  a  special  commission 
and  was  intended  to  assist  the  domestic  shipbuilding  industry  as 
well  as  the  shipping  under  the  French  Hag. 

Much  of  the  benefit  that  might  otherwise  have  accrued  from 
the  liberal  ^.-anty  expenditures  of  France  has  been  negatived 
by  the  almost  irreconcilable  conflict  between   shipbuilder>  and 


i;i'^  INFU-ENCK    OP    Tlir    CtV\'     'N 


liN     Sllll'IMNr, 


ship' n\ tiers.  As  stated  alnive.  I'reiicli  sul)siil\  leRi^latioti  ha* 
attempted  ti>  distrilnite  iM.iinties  U-tween  construitini)  and  iiavi- 
HiiUnu  in  »iich  a  way  as  h>  prumutc  the  interest  i>i  both  the  sliip- 
luiildir  and  tin-  >hii)n\vner.  Apparently  thi>  ri>nlt  lias  not  l)een 
attained,  since  the  -Inpnwners  aeeu-e  the  >hipl>itilders  of  ahstirh- 
iiiK  n.it  nnl\  tlte  enn>trm-ti<'n  h.iunty  hiit  nuieli  ni  the  navigatinn 
h..nnt\  Ii\  raiMiiK  niuKcc-arily  the  jirice- nn  d^tnestic  hiiih  slnp-<. 
(.'asli  ]ia.\inents  are  made  to  the  liuilders  m\  the  hasi,  ni  totmaKe 
.if  >hii.iiin';  tuiih.  an<l  In  the  shipnuner-  nn  the  basis  of  nnles 
sailed  ni  torei«n  trade.  I.n^di-lt  owners  have  eharjjed  that  the 
I'reiK-h  owner>  have  at  times  maile  voyaj;e-<  merely  to  >,'et  the 
bounty. 

It  is  extremely  doubtful  whether  any  -\-tein  of  bounties  can 
under  preseiU  conditions  sulticiently  overcome  the  handicai)s  of 
natural  conditions  so  as  to  enable  j-'rance  to  take  higher  rank 
nmonj,'  the  merchant  navies  of  the  world. 

Italy  adopted  a  sy>tem  similar  to  that  of  !•  ranee  about  four 
vear>  after  the  passa^je  oi  the  first  French  subsidy  law.  that  is, 
in  l^-:..  Moreover.  Italy  has  made  changes  in  her  subsidy 
system  about  as  fretpieutly  as  I'rance.  atul  on  the  whole  has  been 
little,  if  am,  more  successful.  I'.oth  countries  have  been  handi- 
eapped  b\  the  lack  of  a  hi;;hly  developed  iron  and  steel  industry 
such  as  would  enable  them  to  m-inuiacture  iron  and  steel  vessels 
eheajilv.  Italy  has  been  further  haiidicappetl  liy  the  heavy  bur- 
(leit  (if  ta.xation  and  lack  of  coal. 

Japan  rivals  France  in  the  extent  to  which  ■government  aid  has 
been  extended  to  merchant  ship])in!,'.  but  has  been  much  more 
successful.  The  method  followed  has  been  closely  modeled  on 
that  of  I'rance.  The  jai)anese  merchant  marine  has  developed 
more  rapidly  than  that  of  any  other  country  durini;  the  past  .■'..'> 
years.  In  isso  the  economic  condition  of  Japan,  measured  by 
l-.uroiiean  standanls,  was  ])oor.  likewise  the  shipping  industry 
of  the  comitry  was  comparatively  iusij^niticant.  and  consisted 
iarj,'ely  of  iunks  suitable  only  fur  navii;ation  in  coastal  waters  or 
trade  with  China  and  the  nei.i,diborins  islands. 

The    lapanese  merchant  marine  has  developed   from  almost 


<;i>\  I  KNMr.N'r  aid  m  miipimxc, 


i:t!( 


iiothiii^',  ami  ^linw,  a  remarkalilc  rate  ni  iiureasc  larpcly  for 
that  reason.  Nevertheless,  the  increase  in  Japanese  shippin;,'  has 
heen  siili-.tantial.  and  it  is  ihic  in  |)art  to  the  pavment  i)f  htK;ral 
snli-idie-.  The  Japanese  (invenitnent  realized  that  if  she  in- 
tended t.p  Iniild  her  (iwn  vessel-  she  nuist  t"n>ter  the  shijtliuildinK 
industr>  until  her  po'ple  hail  learned  the  Ijiropean  methods  of 
nianniactiire,  and  if  she  intended  to  operate  merchant  ve>sels  in 
competition  with  those  of  I'.nropean  countries  she  mu^t  assist 
Jaj)anese  shijiovvners.  The  industry  coulcl  not  exist  without  this 
aid. 

The  bounty  systems  of  the  Kingdoms  of  .\ustria  and  Huiifjary 
are  cpiite  similar  to  that  of  France. 

.^pain  now  rivals  France.  Italy  and  Japan  in  the  extent  of 
government  aid  to  shipping.  For  many  year.-;  the  onlv  direct 
aid  was  in  the  form  ol  mail  subventions  for  rapid  communica- 
tion with  the  Spanish  colonies.  A  subsidy  system  was  not  intro- 
duced until  the  enactment  of  the  law  of  June  It.  I'.MiJt.  This 
system  closely  follows  that  of  France,  it  is  dit^icult  as  yet  to 
say  what  the  net  result  of  the  law  has  been.  It  is  interesting  to 
note  that  the  law  has  been  suspended  since  »he  outbreak  of  the 
pre-ent  war  in  Furope  largely  at  the  retpiest  of  a  majority  of 
the  subsidizetl  lines,  which  were  making  such  large  profits  as  to 
lje  (|uite  independent  of  the  subsidies  and  desired  to  avoid  the 
restrictions  imposed  by  the  subsidy  laws. 


(f)    SiibTi-iitioHs  to  Porciijn  Stcaiiisliif'  Lines. 

\  number  of  countries  pay  subventions  to  foreign  steamship 
lines.  The  principal  purpose  of  such  grants  has  been  to  utilize 
foreign  sfeam.ship  services  operating  to  re'mtc  points, 

Italy  has  for  many  years  paid  a  subvention  oi  7(t.OO0  lire 
($i;,."il(i)  to  the  Netherlands  Steam  Packet  Co.  for  the  trans- 
portation of  Italian  mails  jjctween  Genoa  and  the  Dutch  East 
Indies. 

Belgium  has  paid  subventions,  either  in  direct  grants  or  in  re- 
imbursement of  pilotage  dues,  port  charges,  etc.,  to  three  (ier- 
num  lines,  namely,  the  North  (lerman  Lloyd,  the  German- Aus- 


1H"> 


IsFl.fKNCK    ( 


ii    rm:  ohkai   w  \k  i  r-nv  smriiNr, 


1    to   a    I)aiii>li    liiK'.    the    I'nitcfl 


traliaii  ami  the  Ko^iihh,  aii< 
St^,alll^hiI)  (  ".  "t  CoiK-nhaf-iii.  for  tlu-  piirixise  nf  having  the 
«tfaiiU'r>  1)1  tlu'sf  lilies  call  roniilarly  at  Antwirp.  liulyaria  hail 
the  'aiiif  nhjfcl  in  view  in  making  annual  iirMU  v<  the  ( lernian 
levant  Line  ami  to  l"rai->?inet  et  lie.,  a  Ireiich  -teaniship  line, 
I'.ir  inalviniL,'  regular  calls  at  lUtrRas  and  \  arna, 

( >ther  ci)iintrie>  lh:»t  have  paid  or  are  paying  snhventions  to 
foreign  steam-hip  hnes  are:  r>ra/il.  which  contracted  in  lt>i:i 
with  iMur  Italian  hues  for  a  service  k-tween  Mraxil  aixl  Italy: 
t'hile.  which  lonnerly  granted  a  snlivention  an<l  now  grants 
valuaMe  whartiiig  privileges  at  Nalparaiso  to  the  I'acilic  Steam 
Navigation  Co.,  a  ISritish  line,  for  carrying  mails  Iwtwecn  Chile, 
I'eni  ;ind  ljiglan<l:  .Mexico,  which  has  granted  subventions  to 
.American,  Canadian,  Ihitish  and  Japanese  lines;  anil  New  /ca- 
lami, which  paid  a  subvention  to  the  Oceanic  Steamship  Co.,  an 
.\merican  line,  for  the  transpurtation  of  mail  between  .Aucklantl 
and  San  I'rancisco. 


Suiiniuiry  of  the  Policies  of  Gozcrnmcnt  Aid  by  Xatious 

Great  Britain. 

I'.ngl.-iii'l  was  the  first  country  after  the  advent  of  the  steam- 
ship t'l  ii.u  subsidies  or  subventions.  It  is  probably  accurate  to 
refer  !•  the  original  grants  to  the  I'enin.sular  &  t)ricntal  Steam 
Xavigation  Co.  and  the  t  unard  Line  as  combinations  of  subsidy 
and  subvention,  since  the  element  of  bounty  predominated  in 
those  years,  although  the  endeavor  to  promote  faster  communi- 
cations to  India  and  .\ustralia  and  to  (  anada  was  also  strongly 
emi)!ia-i/ed.  In  its  early  stages  rapid  steam  navigatitm  was  a 
good  deal  of  an  experiment  and  expensive,  as  the  experience  of 
the  several  subsidized  .American  lines  of  that  ])eriod  abundantly 
proved,  and  the  I'.ritish  Covernment  deemed  it  opedient  to 
contribute  toward  the  expense  of  maintaining  the  new  lines. 

.\n  infant  industry  was  granted  protection,  however,  not 
merelv  for  the  sake  of  the  industries  and  trade  of  Cireat  Ikitain, 
but  also  for  imperial  purpt)ses  or,  in  other  words,  to  bring  the 


GOVKH.NMF.NT    AID   TO    SMIPIMNd 


lit 


0)|i)nies  intn  closer  coniniunicati'iii  with  tlif  nmtlier  CDiintry. 
'Ihc  ciiliiiiial  suhvcntion  I'lenient  in  the  early  grants  tt»  the  British 
>tcaiii->hii)  lines  ix  to  U-  seen  in  the  tact  that  the  first  contract 
with  Samuel  Innanl  called  for  a  service  not  merely  U'twoon 
l.ivcriKiul  and  B«»ston  hut  als<»  for  a  call  at  Halifax  on  lH)th  the 
otitlioiind  and  the  hotneward  voyages,  aiul  fur  a  connecting 
line,  with  two  river  steamers,  l)ctween  Halifax  and  Ouel)ec. 

One  of  the  striking  features  of  the  subvention  policy  of  (Ireat 
Mritain  is  that,  with  few  exceptions,  it  has  consisted  exclusively 
of  grants  for  the  operation  of  fast  mail  steamships  iHJtween  the 
mother  country  and  its  colonies.  .\n  important  exception  at  the 
outset  was  the  grant  to  the  I'acific  Steam  Navigation  Co..  which 
then  operated  exclusively  on  the  west  coast  of  South  America. 
.Another  exception — and  a  more  recent  one — was  the  sul)si<ly 
paid  to  the  KIder-Dempster  Line  fur  a  service  l>etwecn  Jamaica 
and  ICngland,  the  primary  purjwise  of  this  grant  l)eing  the  pro- 
motion of  the  banana  trade  of  Jamaica. 

Cargo  ships  have  received  no  aid  from  the  British  (iovernment. 
\'o  lK)unties  have  been  paid  on  the  construction  of  any  ship  nor 
have  general  navigation  bounties  Iwen  given.  It  might  l)c  sug- 
gested that  the  loan  at  low  rates  of  interest  to  the  Cunard  Co. 
for  the  building  of  the  Lusitania  and  the  Maurctania  is  a  con- 
struction Ixjunty  to  the  extent  of  the  saving  in  interest,  but  since 
these  vessels  were  constructed  to  meet  admiralty  requirements 
and  were  to  have  unusual  speed,  the  saving  in  interest 
really  amounts  to  an  admiralty  subvention  for  admiralty 
purposes. 

The  financial  aid  extended  to  the  merchant  shipping  of  Great 
Britain  h..s  been  limited  to  a  small  proportion  of  the  total  ton- 
nage under  the  British  Hag.  The  L'nited  States  Commissioner  of 
Navigation,  in  his  annual  report  for  1S'.»4  (page  HI),  estimated 
that  the  tonnage  then  in  receipt  of  financial  aid  constituted  not 
more  than  :!  per  cent  of  the  total.  It  is  probable  that  the  propor- 
tion is  no  higher  now. 

Attention  has  been  called  to  the  fact  that  cargo  or  freight 
steamers  have  never  received  aid  of  anv  kind  from  the  British 


112 


iSiMi.vi   OF   riii;  i.KKAi   w  \K  I  r<>\  >>iiin*iN(i 


(iiivernnunt,  aii«l  llii»  i»  irtu'  al^o  i.t  a  minil«r  <if  line*  of  pa'»- 
■^ciiKcr  MeatiuT',  tor  cNanipIc,  tlif  White  Star  l.iiu',  which  ha* 
l)itii  a  oitiipitilir  ni  ihi'  <  ttiianl  l.iiu-  ui  the  transatlantic  trai.c 
•ititl  ha>>  hccn  lar  iiinrc  »iiccc»-.l'iil  as  an  earner  of  ihviileiuU 
than  ha*  its  «iHl)'<iilizei|  rival.  This  is  true  alsti  of  the  Anchor 
line,  the  I.eJantl  I. me,  ami  the  Ucd  Star  I-inc.  in  the  same 
iraile. 

A  sfiking  feature  of  the  polic\  of  I'.nKlaml  is  the  fact  that 
at  the  time  when  the  tir><t  cotitracts  were  made  with  the  (.'unaril 
l.itii-  and  the  reniiistilar  Line  the  jiolicy  of  free  trade  lud  only 
recenil)  iieen  intniduced,  and  that  imt  lonj;  after  (  from  l>»H»  to 
l>">n  Iji^land  discarded  all  «pf  the  protectionist  features  of 
lur  navi}.;ation  law^  which  had  lieen  in  force  for  about  two 
centuries. 

Anioiif;  the  law>  that  were  repealed  at  that  time  were  those 
which  restricted  to  I'.riti-h  diipv  the  C'lasting  trade  >'i  tlu'  I'nited 
Kingdom,  the  trade  lietwcen  the  L'nited  Kingdom  and  the  c.'!- 
ouies,  and  the  trade  amonj;  the  several  colonies;  those  which  pro- 
vided that  no  produce  of  Asia,  Africa,  or  \meri'-a  could  he  im- 
I'lTted  for  consmnptioii  into  the  L'nited  Kiii;,'doii  ',.  ni  I'.urope 
and  that  none  could  I>e  imported  tr^  ni  any  other  place  exce|)t 
in  British  ships  or  in  the  shi]>s  of  the  country  ni  production :  and 
tliiise  providinfj  that  certain  specit'ic  articles  of  I'uropean  pro- 
ilnction  could  onlv  he  imported  i<'T  con-<umi)tion  when  trans- 
ported in  liritish  hottom-.  .\t  the  -aine  time  Parliament  re- 
pealed the  law  j;ivini,'  the  f^ovcrnnient  power  to  impose  differ- 
enti.il  duties  on  ihc  shi])s  of  fortii;n  n.atiotis  that  levied  siniilar 
duties  on  l?ritish  ships  and  the  law  restrictinfj  Uritish  registry 
to  I'ritisli  Imilt  sjiips. 

The  continuity  of  siilivention  p,i\nietU>  to  the  lines  originally 
receiving  such  payments  is  .inother  fe.iture  of  the  system  of  gov- 
ernment aid  a->  followed  l>y  (ireat  I'.ritain.  .Ml  of  the  original 
suliventioned  lines — the  I'enin-ular  i\;  ( )riental.  the  t'unard.  the 
Royal  Mail  Steam  Packet  (.'n.,  and  the  Pacific  Steatu  Xaviga- 
tion  Co. — are  still  in  existence  and  are  still  receiving  mail  suli- 
ventions.     The  support  of  the  British  (iovernmeni  has  been  con- 


iiUVKR.NMK.N  r    Ml)    r.l    !«I||I'|>|N(; 


lit 


»tant.  In  thit  reiprct  itt  |K>licy  i*  in  iiurknl  i-ontrn^t  tn  ihat  of 
Ihf  rniccfl  State,  which  cmiiifry  has  l»ecn  ^|ia<nui«lic  in  it*  tgp. 
|H»rt  tif  |ji)c<i  psiattli^hcd  iiiu'^r  !»uliv«»iiim!i. 


The  (nnadian  (invtrnnicnt  |)r()(H)!k'n  to  grant  lonnaKe  lx>iimir« 
to  e(|ttali/c  the  ililTiTcncf  in  cost  of  i'on*triiction,  a«  ioni|>arc(l 
with  the  price  charKcil  by  Hriti-th  tirni<*.  'fhc  construction  of 
stfcl  vessels  iinilcr  this  scheme  had  iKfcn  lieguii  as  early  a^  June. 
lIMi!.  at  Halifax.  N'ova  Scnti.i.' 

Suli^idies  have  also  U-en  |)ro|K>'e<l  by  the  British  lohintliian 
< iovernnient.  by  the  Nova  Scotian  (iovernment  and  by  *e\eral 
municipalities.  In  sonic  cases  free  sites  are  to  be  granted  to 
shipbuilders  and  the  laiul  is  to  lie  free  trom  taxation. 

The  Gnvernment  of  British  Columbia  has  passed  an  act  pro- 
viding for  .i  shi|)ping  commission  with  jxiwers  to  own.  buv, 
lease,  manage,  charter,  build,  rebuild  and  repair  ships  and  all 
kinds  and  descriptions  of  pruj^rty.  The  commission  also  has  the 
administration  of  the  '<ul)sid>  p<.licy.  The  act  provides  for  loans 
amounting  to  .•.,".  \wt  cent  of  the  value  of  the  >hip<.  built,  con- 
struction to  be  under  the  sui)ervision  of  the  Iniard  and  upon  plans 
and  speciticntioiis  ajiproved  by  the  Ixiard.  The  loans  in  ilirect 
aid  will  lie  pai»l  to  the  owner  of  each  shiji  up  to  the  iiumlier  of 
not  more  than  JO  ships  constructed  and  launched  in  the  firovince 
after  the  coming  into  etTect  of  the  act,  in  ten  annual  instalments, 
each  instalment  being  computed  so  as  to  bring  the  net  eaniin.'js 
of  the  "hip.  i'.  ri:s|KTt  of  which  aid  is  granted,  up  to  l.i  per  cent 
of  the  actual  cost.  The  subsidy  paitl  on  any  one  year,  however, 
.shall  not  amount  to  more  than  $.'.  per  ton  dead-weight  c.i  tacity. 
The  first  annual  payment  will  '  e  made  the  tirst  \car  ailcr  peace 
IS  declared.  It  i^  stipulated  that  the  Ixiunty  will  Ik:  paid  onlv  so 
long  a-,  tile  ship  remains  in  continuous  Mriiish  '  olunib'  i  >crvico. 
that  is.  carries  cargo  from  I'.rifi-h  Columbia  and  briii;,s  return 
cargo  to  the  pro\i!ice.  Provision  is  also  ma<k'  for  aid  to  ^]vp- 
building  plants  to  the  extent  that  the  coinmi.ssiuu  may  advance  in 

'  Uiiriii.'  iV,:iV,\'.  Novrmlur,  191(,.  p  .?73,  .-iml  /  (iir/i/av.  June  8,  \')U).  p  888. 


1  U        IM  :  I  v.sn    <»►    nil    «.«•  »'    «  ^M    '  I 


thv 


\   -iium'Im; 


,11      t   I  ■  'culiiif;*. 


M'viiritU-'  I"  Oil"  iin.'imt  "S  .".:>  jwr  cem 
j.lant  «■«  kiTtitioi  t»>  fhf  c-iifiUMi'M'tti ' 

Thi'  mail     iil>«i<l\   ti  the    \ii«  klatul  \  ;i 
ri'f*-«^l  t"r  tni><ltrf  \far  at  tlw  ralv  '>f 

t,t'»r-"nuiTt  i.ritrilmi."  .•  ?iU-  m-iu      Mir  >    n.'  tl»f  -n'  - 

»;.'n   ,.r..vi.!r    thai  «iK    -iv.Mtrr^  ..t  i    i-  tmv  «'*  /.••alttti.; 

tii.i   «.  ai-ailia-i    .hi|HiH-nt-   pn-lV-reti'          Iliv   la^      v..  .t     nici 

t:   -I   \<xk\v   '  |.    Xiiuutivcr  t.M.k  -.rfv  liiile  ini^ht  !<  t  ( mis 

t«»  ,  ,i  l'nit?(l  >ta»t-.  •imi-  ni- -I  '  t  '  :  *\>,,Ci-  wa    taken  Wv       ••>- 

dian   ill)  rr^;   Ami    ■'•   i*  «imUrM."       ilwt    ;  ravi    ally  the   -tnc 
t<  u(lu!'<!»-  i»rvvii  '  ai  \  aiici finer. ' 


ial     nl  1-.  t'Tulivl  lu   thr  L'nitcd  Stati 
sulivrmmti!.    >uch  paynictii*  mu>  1 


r.7    !*''•»  I    I"*" 


The  I't!!      \\Te*t  i  naitf 

has  Jlfl-d  til'    jiaMIHll!  n!  rn.l' 

ihvulftl  mti'  ihrcf  |i*ti-m|s.  naituiy.  I-IT  v 
jiul  I"'*!  I  .iKitf.    Triiir  t"  Mk  ctiactinfiit  <if  •     -ii.mi;!     uUm 
nt   March    1.    I*!'',  the  f     a-  of  the  I'niicd  Staf»->.  aluiv 
hnt  «eri'  -'n.      h,.t  ^pa-ir  ..Ik  .lul  laiUe<l  <h-t-nit.   j)iirp<iM;, 
|).,reiitlv  ti"'  mu       \va«  e\|*cie.l  within  u  short  imih-  atui  n. 
mistake'  wiTc  II    'le.  ihr        ■  iif^'  j.r..t)itiiem  l.*^n..   th- 
rive 'Jiee'l  rt-  nircti  nt  tlu-  ■  "lliim  Liiu    ind  tl  <•  u- 
Icilihy  in  1"«Tj  til  iihtaii!  an  ,i(Kht!"n;»l  -iii.ventiun 
Mail  Sit-aivi    up  f.ine      i  In-  cxiieriencc     '  'he  '  'n 
mail  •uhventii.i     h;«>  it"t.  iherei    ri*,  Ik;  r  y  . 

Thv  fiieniiam  -h;]-'iiii;  -.1  the  ''niteu  "■  "  ii:^- 
a  m«  era  >mce  the  i  viiireak  if  ;i'  war  Eufi-i 
leKC  fjranieil  tnuUr  the  xhip  re};istr\  ai !  \\i^u 

repistiT  n<j  tureij;ii  I'uilt  >hi|»>  in  the  I      s^r-l  "«tate 
;irea!  a«-i>t;iiKv  in  she  «le\fl..i.meiu  -it    'ftc  Americai 
Miarinc  and  nia\  cont'iiue  t     ■  •   ^d.     M.fi      er,  a-  a  ri 
exter  -ivi    , level. >|mu-   ■   nf  ti,.    -hiphu'ldit:      'tidu<tr\ 


law 


•f  a  I  Til  t 
the  I'nciiir 
Sfatt     \Mth 


■.!) 


iht 


Ut  ri-iri    of    \  111     •        -111    '< 
'  V    S.  Ci'i'i"'   '■I'l'  /  '.  '*' 


'     NcviC"  It'll'    Vi 


•ria       .t/j 


.11  n^  tne 


f;i»VfK\»ii:N  I    Mi>   III   iliti'M.vi; 


n:> 


}iu-i  !•»  rri.  njht  dinii.  tt  \»uU  ma\  pottihiv  be  MAv  in  l!ic  (utuff 
lo  oiiitiittc  im  more  rarh  i  en  tcrm»  with  tlw  •hrpxanU  o< 
•  irpat  llr  -ain 

We  hi    c  ihc  m!frt»ti»i({  t  xaniplr  "f  a  <>inKt«  AnRTuan  fttv, 
r*orllainl      >rii;tiii     'Tiin  -.h  imsuJcriMif  ihr  ailvi»al)ililv  «i(  *uS.- 

, i'f<if{ni«inK  the  n«^l    i  tetter  «»hi(|>i»K  fafittiir*,  |iartK«- 
mriy  for  ( >'hirii''ia   Uim      irafHc,  ati«l  iletrrnitiicil  lu  {.ikt 
-■"'irf  arti'in  IcMikuig  U>  !i    !<ruvcmctit,  aUnit   *<»  of  the  rcji 
-«it»tiv«'  liu<iite»»  til'  I'ortlaiKl.  Ore     retrcnl'     tiics 

h   th<     lirci'tnrale  •  chamlirr   ni    titmmcnc   and 

Irtui       int  which,  it  i      .rlicveti,  will  »<>lvc  the  que»t«on. 

.  .1/  ki-xjtw  for  '  Ktober,  H'lt',,  hnrtly  otitliiirc!   the 

rojeci  =t,'uratcil  (or  imancing  a  cniti|any  for  the  ^.m- 

trticikii>  hi|i>«  ii  operate  lieUveen  Ci  rtlaiul  ami  \la*ka. 
Pugcl  So  ,ii(l.  San  Kranoscd.  ami  "ther  points  on  he  I'a- 
citk  Coa^  The  r>lan  to  rai^c  a  tax  <<(  one  null  a  vear 
for  five  >i  ar*,  ihf  urn!  lie  (li<tiK)se<l  it  liy  a  comnnnist'-iier 
ol  ilm-k^,  jHirt  ot  I'ortl-iiMl,  i>r  a  sjietul  fihipptng  commi'^- 
*ion  auth'irizeil  In  l**ir  ivi  ict,  in  the  fortn  of  a  ".iilHiiv 
or   lioiui"    for   sicii  iine-  that   will  give   the   service 

nee'liHl' 


Inlircit  Aid     The  nior 
can  built  ve!«'«els  ha>.  k-en  ai 
lu  a  certain  |Kiint,  l>ut  it  con 
trade  despite  our   jwlicy  oi 
tcrials, 


the  coasting  trade  to  Ameri- 
i^e  that  built  up  out  inarine 
elp  i:-  t<»  enter  the  owrsea* 

imp<iri  of  sliijibuikling  ma- 


iicrmany. 

The  fiiumcial  ai<l  extemled  to  the  merchant  "•Hippinp  of  Ger- 
many .1 ,  'ii'cti  coni|Kirativcly  sinall,  .ind  may  U-  >  id  to  have  jjeen 
given  as  nnich  for  the  extension  of  Get  nan  trade  and  inlluence 
as  for  the  dcvc'  ipment  of  German  shipp  ip.  i  he  lar^jot  of  the 
German  Jiiu-,  the  llamhuri^- American  l.inc,  whiih  is  ot f  of 
the  lar^'c-t  in  the  world,  has  develi  :icd  rapidly  without  iirect 
j;jvcrnincnt  aitl      Much  of  the  development  •»!  the  next  largest 

'  Murine  n'rti.Tf    Oct'  hi',   lyl'i    \\    JS.' 


n<: 


iNii.riNiK  or  Tin;  (;Kr.AT  wak  ri-ns   .■.iiifi'iNn 


(iirniaii  liiu',  tlic  Xnrth  CuTman  l.lnyd.  has  lui-ii  accnmplisliccl 
.11)  tlif  iin>itli>idizt.il  -cr\iciv  I'lic  niily  imixirtant  iiwil  Mihvi-n- 
tinii  iniitrait>  liavc  l.ccii  uitli  tin-  Nnrtli  (icriuan  LInul  fnr  -trrv- 
iccs  to  tlic  I'ar  i:a>t  and  Australia  and  witli  tlic  ( icrinaii  I'.ast 
Africa  Lino  I'l  r  -orvico  in  the  (itrnian  l'.a>t  African  cnl.inics. 

The  rapitl  dcvcloimient  <>i  the  (iernian  incrdiant  marine  is 
^\m^  chii'llv  to  favoral>le  ccnnoniic  cnnditidns.  Ttii-  iin])iirts  and 
i\|)urt>  of  (Icrninny  arc  not  only  larjjc  hut  also  well  halanced  in 
t 'linage:  moreover,  the  foreign  trade  is  concentrated  lar^jely  at 
Hainhiirj,'  and  liremen.  which  assures  a  maximum  of  car^o  for 
ships  calling;  at  these  port>.  Much  of  the  success  of  Cierman 
shippin;;  is  atirihutalile  al^i  to  the  etficieiit  coordination  t)f  the 
industrial  and  commercial  activities  of  the  country.  Meiitii^n 
>hould  al>o  he  made  .if  their  >uccess  in  forminfj  comhinations 
and  in  driving'  away  foreign  competition  as  explained  in  Chap- 
ter  1. 

Ri'Si'nvtiiiii  of  Codstiiiij  Tnulc.  The  coasting  trade  of  fler- 
manv  is  open  to  the  ships  of  all  nations  grantin;;  reciprocal  priv- 
ileges. The  (icrnian  seacoast  is  of  comparatively  small  e.xtent 
and  (titers  little  >npport  f.ir  the  development  of  a  merchant 
marine.  The  hi;;hly  .leveloped  system  of  canals  and  railroads 
in  (iermany  affords,  on  the  wliole.  a  more  direct  and  efficient 
means  of  transportati.m  hetueen  points  located  along  the  >ea- 
hnard  than  is  possilile  on  the  Xoith  and  llaitic  seas,  alth.uigh  the 
Kaiser  W'ilhelm  lor  Kiel)  Lanal  shortens  hy  hundreds  of  miles 
the  journey  hetween  j)oint-  on  the  Xorth  Sea  and  the  lialtic 
Sea,  and  has  d.me  nnich  to  improve  the  coasting  trade. 

Exemptions  from  Import  Piitics.  (iermany  has  long  pursued 
the  policy  .if  granting  free  admis-i.m  to  foreign  Iniilt  seagoing 
ves-els  and  to  foreign  Imilt  vessels,  other  than  pleasure  craft, 
for  navigation  on  rivers  and  lake>,  and  this  policy  is  ■^till  pur- 
sued, although  the  domestic  shiphuilding  industry  has  developed 
greatlv  and  is  now  alile  to  turn  out  the  tonnage  demanded  hy 
(jernian  shipping  interests. 

.Although  there  is  no  general  recpiirement  that  ships  seeking 
registrv  in  Germany  must  be  built  in  German  yards,  it  is,  nev- 


GOVERNMENT    AID    TO    SHIPPING 


147 


erthcless.  required  tli.it  the  vessels  of  siibventioned  lines  must  be 
of  domestic  constructinn. 

Another  ailvania>,'e  enjoyed  In  (lerman  shipbuilders  is  the 
privilege  nf  importing,  free  of  duty,  foreign  materials  required 
for  the  constructinn,  e(|ui])ment,  or  repair  of  vessels,  other  than 
pleasure  craft,  for  use  on  the  high  seas,  rivers,  or  lakes. 

Preferential  liaiheay  Rates.  The  policy  of  granting  |)referen- 
tial  railway  rates  on  ■-iiijiljuilding  materials  transported  from  the 
interior  section  of  (iermany  has  also  been  of  marked  benefit  to  the 
German  shipyards.  This  policy  was  instituted  in  October,  is>."., 
and  provides  for  a  reduced  rate  for  thp  transportation  l)y  rail  of 
raw  and  manufactured  materials  used  in  shipbuilding,  such  as 
^teel  plates,  angle  l)ars.  rivets,  bolts,  chains,  anchors,  etc..  shipped 
from  the  j,'reat  centers  of  the  iron  and  steel  industry  on  the  Rhine 
to  the  shipyards  at  Hamburg,  Bremerhaven  and  other  j)orts. 

In  addition  to  the  reduced  rates  granted  l)y  the  state  railways 
for  the  transportation  of  shipbuilding  materials  from  the  Rhine 
and  other  districts  to  the  great  shipyards  at  Hamburg  and 
ySrenierhaven,  I'e  state  railways  ofifer  special  reduced  rail  rates 
on  practically  all  export  commodities  shipped  on  through  bills  of 
lading. 

A  special  form  of  preferential  railway  rates  was  introduced 
on  June  1.'),  Is'.io.  when  the  (ierman  Levant  Line  was  established 
and  was  used  again  on  April  1,  r.»l.">,  in  the  case  of  the  German 
East  Africa  Line.  Goods  exported  from  interior  points  in  Ger- 
many on  through  bills  of  lading  either  to  the  Levant  or  to  East 
Africa  via  these  lines  are  granted  largely  reduced  transporta- 
tion rates  on  the  German  state  railways.  The  railway  portions 
of  these  through  rates  are  s^id  to  be  much  lower  than  those  ap- 
plied to  goods  sent  to  German  ports  for  exportation  by  sea  to 
other  sections. 

The  rates  given  in  the  tarifT  of  the  Levant  Line  are  based 
upon  the  arrangement  of  this  company  with  the  German  Govern- 
ment for  carrying  exports  from  the  interior  of  Germany  to  the 
ports  of  the  Levant  (excepting  Tunis  and  Tripoli),  inclvuling 
Malta,  -Alexandria,  Pir.x'us,  Smyrna,  all  the  important  ports  of 


UA 


INFI  IKNll.    1)1     Till-:    (,RK.\r    W  AK    IPON    SirllMMNC. 


Turkcv,  r.iilKaria.  koumania  (and  various  -tations  of  the  I  urk- 
i-li  ami  r.ulKanan  Kailwav  ).  and  all  ports  on  the  I'.lack  Sea. 
Iieside>  living'  lavond  h\  the  reduced  sea  lrcit;hts  <.i'  the  Levant 
Line  an<l  tiie  (lernian  state  railways,  jjoods  sent  hy  this  com- 
|ianv's  steamers  on  tiirouKh  hills  of  lading  are  allowed  also  re- 
duced rate>  of  tr,insi)ortatii)n  on  the  Turkish  and  IJulgarian  rail- 
way lines,  if  destined  for  stations  thereon. 

How  the  preferential  railroad  rates  of  (iermany  work  <nit  in 
practice  was  recently  stated  by  l<u\xn  1'.  Skinner,  the  United 
States  consul  {general  at  HamhurK.  In  a  report  to  the  L'nited 
States  ("lovcrnnient.  quoted  in  rairflny.  March  :i().  I'.tKi.  he  wrote 
that  in  Xovenihcr,  UMl.  a  manufacturer  in  the  vicinity  of  Frank- 
fort shipped  one  hundred  cases  of  zinc  dust  to  Lorenzo  Marques, 
upon  which  the  transit  tariti'  irom  Frankfort  to  destination  via 
Hamburg  wa-  Si:!:.'. Ml;  whereas  a  Hamburg  exporter,  under- 
taking to  forward  a  similar  consignment  out  of  his  local  stock, 
would  have  been  obliged  to  ]ay  in  the  first  place,  land  freight 
from  Frankfort  to  Hamburg  $:r2A\.  plus  sea  freight  amounting 
to  $L".2.TT,  or  almost  "-<»  per  cent  more  than  the  shipper  from 
the  interior.  The  Hamburg  exporter  got  over  the  difficulty  by 
sending  his  goods  tcj  a  nearby  town  in  the  interior  and  thence 
rcshipping  them  under  a  through  bill  of  lading  to  the  foreign 
destination,  so  as  to  obtain  the  export  rate.  The  effect  of  this, 
of  course,  is  to  enable  the  shipper  to  deliver  his  goods  at  the 
destination  at  a  lower  freight  charge  than  the  British  competitor. 
as  well  as  to  prevent  the  British  shipowner  carrying  the  goods.* 


France. 

France  has  been  called  the  "bounty  giving  nation  par  ex- 
cellence.'" The  policy  of  granting  aid  to  the  merchant  shijiping 
of  France  has  been  so  long  in  operati(jn  as  to  have  become  virtu- 
ally a  tradition. 

The  policv  of  granting  mail  subventions,  which  seems  to  have 
produce<l  better  results  than  the  l)ounty  sy^tem.  was  instituted 
on  a  formal  contract  basis  as  early  as  1N.')1  and  has  been  in  force 

'  I'dirfliiy.  March  30.  1916,  p.  535. 


GOVERNMENT    MO    TO    SHIPPING  1 4',t 

since  that  time.  The  luujnty  system  was  not  introduced  until 
1H><I  and  has  Iwcn  in  force  continuously  since  that  time.  aithouRn 
.".  numl)er  of  important  changes  have  iieen  made  in  the  original 
scheme.  Ilach  succeeding  sulisidy  law  has  l)een  more  exacting 
in  its  requirements  and.  on  the  whole,  more  lilicral  m  its  pay- 
ments than  the  preceding  one.  The  amendment  wever,  do 
not  appear  to  have  had  the  desired  ef^fect.  for  ...  substantial 
i)encfit  has  resulted  from  the  large  amounts  expended. 

-As  has  been  stated  above.  France  has  attempted  by  the  j)ay- 
ment  of  liberal  bounties  to  overcome  serious  handicaps  of  her 
present  economic  condition. 

Italy. 

Italy  has  followed  the  example  of  France  in  attempting  to 
overcome  natural  handicaps  by  the  payment  of  liberal  subventions 
and  subsidies.  .\n  elaborate  system  of  bounties,  which  was  in- 
troduced in  Italy  in  ls,s.-i.  or  about  four  years  later  than  a  simi- 
lar system  was  adopted  in  France,  has  not  on  the  whole  been 
successful  although  large  amounts  have  been  expended. 

The  mail  subventions  have  probably  been  more  successful  than 
general  subsidies  and  the  large  expenditures  made  on  this  account 
have  been  warranted  to  a  great  extent  as  a  part  of  the  Italian 
program  of  greater  influence  in  the  world's  affairs  and  because 
of  the  use  of  these  ships  a«-  an  auxiliary  for  the  navy. 

Austria-Hungary. 

The  policy  of  Austria-Hungary  is  really  the  policy  of  the 
Kingdoms  of  Austria  and  Hungary  acting  in  their  separate 
capacities.  The  policy  of  granting  financial  aid  to  shipping  has 
been  in  operation  in  Austria  since  \fi'>(]  when  the  state  assisted 
in  the  organization  of  the  Austrian  Lloyd  by  guaranteeing  the 
interest  of  the  capital  borrowed  by  the  promoters  of  the  com- 
pany. From  that  day  to  this  the  relations  of  the  Austrian 
Lloyd,  which  has  tlie  largest  amount  of  tonnage  under  the 
Austrian  flag,  and  the  Austrian  Government  have  been  inti- 
mate. 


I'lO  INKLrKNlE    OK    THE    CHEAT    WAK    I  I'oN    SllII'l  ISO 

Jitf>iin. 

The  policy  of  jjrantiiijj  direct  Cinancial  aid  to  merchant  ship- 
jiiiif;  was  adoptC'.l  by  Japan  not  Ioiik  after  that  ooutitry  adopted 
the  lutr.ipeaii  ty()c  (  f  shij).  The  urigiiial  grants  were  mail  sul)- 
veiitions  to  promote  steamship  services  in  the  adjacent  Far  East. 
A  liberal  subsidy  policy  was  instituted  in  H'.Hi  under  a  law  re- 
seniblin},'  in  many  respects  the  Mibsidy  laws  of  I-"rance.  'I  he  ex- 
penditures of  Japan  for  mail  subventions  and  subsidies  have  Ijeen 
very  lil)eral.  The  fact  that  the  merchant  marine  of  Japan  has  de- 
veloped very  rapid'y  since  the  institution  of  the  subsidy  policy 
has  iK-en  attributed  i)y  many  to  the  lil)eral  state  aid  which  it  has 
re.-cived,  but  account  should  be  taken  of  the  fact  that  Japan  has 
h.ii,  a  remarkable  industrial  and  conmiercial  develoimient  durinij 
this  period.  .Mthough  the  principal  Japanese  steamship  companies 
have  been  in  receipt  of  jjovcrnment  aid  since  1>»^  and  have  de- 
veloped rajjidly,  their  financial  statements  for  recent  years  show- 
that  thc\  have  not  got  beyond  the  need  for  financial  assistance 
from  the  slate.  In  other  words,  the  "  infant  industry  "  has  never 
grown  up. 


Scandinofian  Countries. 

Norway.  Sweden  and  Denmark  have  merchant  navies  that 
rank  among  the  largest  in  the  world.  These  countries  rank  very 
high  in  respect  to  per  capita  ownership  of  merchant  shipping.  The 
development  of  the  merchant  marine  of  Norway  has  far  out- 
stripped that  of  France,  and  has  been  due  in  a  very  small  de- 
gree, if  anv,  to  financial  aid  granted  by  the  Norwegian  Govern- 
ment. The  grants  made  to  Norwegian  shipping  companies 
have  been  primarily  and  alnnxst  exclusively  for  the  maintenance 
of  mail  services  along  the  coast  of  .Norway.  The  high  rank  of 
Norway  as  a  .shipping  nation  is  due  to  the  seafaring  qualities  of 
her  people,  to  her  geograjihic  location,  and  to  the  fact  that 
because  of  her  limited  industrial  development  merchant  shipping 
offers  greater  financial  rewards  and  l)etter  (jpportunities  fur  the 
em[)loynient  of  her  capital  and  her  ])eople. 

The  policy  of  Sweden  and  Denmark  has  !)een  similar  to  that 


r,OVERXME\T    AID    TO    SUIPPINC  151 

<ii  N'tirwav  in  that  the  financial  ai<I  by  the  Rovenmient  has  lieen 
liniitcil  chiclly  to  the  payment  of  small  amounts  i<>r  mail  and 
trade  communications,  mainlv  within  the  limits  of  the  Baltic 
Sea. 

Tltc  Xi'lhcrlamts. 

The  piilicy  of  the  Netherlands  has  been  distinpui-hed  by 
the  tact  that  no  bounties  or  subsidies  have  been  paid.  The  direct 
aid  extended  by  the  government  has  been  e.xdusively  for  mail 
subventions  to  improve  steamship  and  mail  communication  with 
the  far  distant  coldiiies. 

Belgium. 

The  most  striking  feature  about  the  policy  of  Belgium  has 
been  the  indilTercnoc  to  a  Belgian  merchant  marine.  Belgium, 
which  has  a  very  large  ..verse.is  trade,  has  been  content  to  have 
most  It  this  trade  carried  in  foreign  bottoms  and  has  gone  so 
far  as  to  subsitlize  directly  and  indirectly  three  German  lines 
nnd  one  Danish  line.  ^ 

Sl>ain  and  Portugal. 

Spain  has  pursued  the  policy  of  granting  mail  subventions 
since  l.Ntil,  when  a  contract  was  made  with  the  Compatlia 
Transatldntica  Espaiiola  for  the  regular  transportation  of  mails 
to  Santo  Domingo,  Cuba,  and  Porto  Uico.  and  it  was  not  until 
liMt'.i  that  a  general  boimty  or  subsidy  law  was  instituted.  The 
pa\.  nts  of  financial  aid  to  the  merchant  shipping  of  Portugal 
have  been  on  account  of  mail  subvention  contracts  for  regular 
tr.-'nsportation  on  routes  lietween  Portugal  and  her  several 
colonies. 

Latin  .Imcrican  Countries. 

Subventions  are  paid  by  five  Latin  American  countries,  namely. 
Brazil.  Chile,  (iuatemala,  Me.xico  and  Peru.  .Ml  of  these  coun- 
tries pay  subventions  to  foreign  lines  for  the  purpose  of  having 
the  benefit  of  the  overseas  communications.     All  e.xcept  Guate- 


i:.2       iMi.ri.Nir  "K   rill,  c.hiat  w  \r  i  pdn  siiu'imm; 

mnla  pay  sulivcnlions  to  natixnal  lines  also.  Imt  the  amounts 
thus  paid  hy  Mexico  were  small  and  were  for  inland  river  lines. 

Tin:  Inflifnck  of  the  W.vk 

The  basis  of  jjovernment  aid  to  >hippinR;  has  been  mo«litied 
and  largely  destroyed  for  a  time  by  the  war.  First,  it  has  put 
the  freight  rates  up  so  that  any  ship  could  make  profits  any- 
where, ihe  retpiest  of  the  Spanish  lines,  mentioned  above,  to 
be  freed  from  their  subsidy  contracts  so  that  they  could  roam 
the  seas  an<l  make  money  is  interesting.  The  seizure  of  ves>els, 
l;oth  line  and  tramp,  by  governments  and  their  operati.-n  t.n 
government  order  far  transcends  anything  before  known. 

However,  the  war  will  end  i)re'..ently  and  the  war  experience 
will  have  its  chief  result  in  making  men  feel  the  need  of  ships  and 
manv  nations  will  examine  anew  the  prewar  experiences  to  >ee 
which  method  shall  be  used  to  guarantee  national  ships  upon 
the  sea. 


CHAPTEF  ^ 

Control  and  Operation  of  Shipping  by  the  British 
Government,  1914-1918 

The  Government's  Reqiisition  Policy 

The  war  with  its  siKlden  demand  for  overseas  transport  found 
plenty  of  idle  ships  available  for  the  needs  of  the  Rovernment. 
The  Admiralty  and  the  \\  ar  Office,  following  accustomed  prac- 
tice, chartered  them  for  a  time  as  any  other  charterers.  They 
also  requisitioned  some  ships,  as  British  law  provides  that  the 
Rovernmcnt  can  take  the  ship  first  and  pay  for  it  afterwards. 
In  fact,  many  steamers  taken  in  August  had  not  had  rate  of 
settlement  agreed  upon  the  following  January.' 

Octolxjr,  lit  14,  brought  the  realization  of  a  long  war.  The 
British  Government  settled  down  to  it  in  earnest.  Shipping  rates 
started  to  rise  and  the  government  instead  of  getting  ships  one  at 
a  time  on  individual  dicker  at  market  rate  through  brokers,  estab- 
lished the  now  famous  and  much  denounced  Blue  Book  rates, 
which  were  published 

in  Blue  Book  form  in  October,  1914.  based  upon  normal 
working  expenses  at  that  time,  by  the  Admiralty  .\rbitra- 
tion  Board.  The  government  rate  of  hire  (lis.  per  ton 
gross)  for  a  common  ocean  cargo  steamship  of  the  popular 
size  of  7,000  tons  dead-weight  carrying  capacity,  works  out 
about  (is.  <jd.  per  dead-weight  ton  per  month,  out  of  which 
all  the  running  expenses  including  wages,  provisions,  stores, 
repairs,  renewals  and  maintenance,  marine  insurance,  pro- 
tection and  indemnity,  management  and  superintendence, 
etc.  have  to  be  paid  by  the  owners.  The  gross  monthly  hire 
of  such  a  British  tramp  is  about  £2.1'"")  sterling,  paid  only 
so  long  as  she  is  in  an  efficient  working  condition. 

'  Fairphy,  January  14,  1915. 

15S 


u>\ 


rSri.I'KNt  F.    (IK     IIIK    (JHKvT    W  AM    I   PON    SIIII'l'INT, 


I'ho  iKiitr;iI  sti-atiuT  nf  the  sitnc  ^"I.'hs  has  licin  paiil  dur- 
ing; I  hi'  |).i>t  \far  (  I'-' in  I  iij)  tM  l.'.s.  per  ilcad-wciylit  tmi  per 
iii'iiith,  I'lJiploM'il  in  ISritish  trades  fnr  cuiitiinioits  [HTinds  t)f 
time,  sci  that  lier  i^rnss  monthly  !iire  ha-  been  a<  IiikI'  -is 
tl.'>,7."'t>  sterliiij;,  or  close  «[Mpn  seven  times  tlie  inonthlv  xrn«i< 
earnings  of  a  similar  re(|ui>iiii'ned  I'.ritish  ear;;o  -teanu-r. 
...  A  particidar  case  of  three  steamirs  ninler  reipii-itioii 
tor  lonfj  periods  lias  Ixen  hroiijjht  under  my  notice,  uhere 
the  (actual  working  expenses)  t"iy;ures  show  th.it  the  ;,'ovcrn- 
ment  rate  of  hire  is  less  than  the  actu.tl  e\peM>cs.  uluit  tlw 
tiKst  of  iiuiriitr  iiisiiriiiur  at  rc[<hnt-mcn'  :\ilui-  /"tiytihh-  hy  the 
tn<ucr  is  taken  into  account,  because  oi  the  heavy  increase 
in  wiirkinj;  costs,  anil  p.irticularly  the  fjreat  rise  in  marine 
insurance  preniinnis  since  the  I'lue  I'.ook  rates  were  insti- 
tuted.' 


These  rates  represented  a  fair  competitive  rate  at  the  niotneul. 
hut  they  retlected  the  market  for  scarcely  a  week,  as  they  were 
made  at  the  very  he^'innin^'  of  the  swift  and  unprecedentcil  ascent 
of  rates  which  ,t;overimicnt  reciuisitioning  heli)ed  to  produce.  A 
year  later  one  of  the  under-secretaries.  Dr.  Mc.Vamara,  >peakin ; 
in  the  House  of  Commons,  in  answer  to  the  (juestion  as  to  how 
nujch  more  the  government  was  iiayinj;  for  chartered  vessels  at 
the  present  time  as  compared  with  the  prewar  period,  said,  fh.it 

in  the  case  nf  transp<rts  the  percentage  of  increase  in  the 
price  per  ton  may  he  taken  .is  al)out  1)  per  ••••nt  above  the 
figures  generally  ruling  at  a  date  shortly  before  the  war. 
Ill  the  case  of  colliers  the  rates,  so  far  as  ci  niparablc.  are 
about  I^  per  cent  higher  than  in  I'.tl."!,  while  in  the  case  of 
oil  ta  kors  the  rates  now  paid  are  actually  20  per  cent  lower 
than  in  l".tl:>.  When  it  is  borne  in  mind  that  expense.-  have 
materially  increased,  in  some  instances  by  over  100  per  ccni. 
it  will  be  seen  that  shi|)ow:'  .  are  receiving  net  consider- 
ably less  when  chartering  the  vessels  to  the  government 
than  shortly  before  the  war." 

The  British  shipowner,  long  subject  to  the  tUtctuations  of  the 
market,  taking  all  he  could  get,  sta.iding  his  losses  when  they 

'  tuiirphi\.  Fdiriinrv  15.  1017,  p.  308. 
'Ibid.,  November  4,  1915.  v.  715. 


BRITJSIf    CONTROI.   AN'D   OPERATION    OF    SIIIPHIN,;  I.',.-} 

came,  has  l,«rn  in  a  prculiarly  exasperating  situation.  Here  was 
his  sh.p  taken  f.y  the  p.vcrnment  at  a  l.-w.  n.,t  t..  sav  unpn.rttal.le 
rate,  an.  here  was  the  ship  market  where  the  law  of  supplv  an.l 
«Ien.an.  let  fortune  lie  in  every  charter.  Naturally  this  follower 
.'.  supply  a,ul  .lemancl  felt  an^-rieve-l.  an,l  that  conservative  ship- 
pniK  journal.  Lloyd's  ll\rkly.  stated  his  feelings  thus: 

There  is  ro  reason  why     following  the  universal   law  of 
evir>  !,en.se  fo  the  prohts  accrunig  from  increased  freights.' 

Fortunately  for  Hritain  this  appeal  for  an  old  right  which  had 
snddenly  l.cn.e  almost  the  right  of  piracy  has  fallen  upon  dca 
governmental  cars.  *^ 

The  British  (Jovernment  gave  the  ship<nvner  a  verv  subst.mtial 
•snp.  houover  hy  promising  that  the  vessels  were  to  lie  taken  onlv 

left  free  to  work  the  competitive  market,  which  woul.l  naturallv 
r.se  „,  response  to  the  shortage  created  by  the  re.,uisitions  of 
f;..ver„nK-nt.  Thus  he  coul.l  recoup  himself.  .Apparcntiv  the 
adm,n,strat.on  ma.le  a  consistent  e.Yur,  to  leave  this  free  margin 
of  .sh.ppmg  for  all  the  owners.'  hut  fJoyd's  aliege  that  i,  was 
not  always  done.'  and  Pairplay.  the  cuampion  of  the  individual 
owner  mamtamed  at  the  end  of  lin.i  (see  Januarv  4.  is-ir  page 
10)  that  either  the  Blue  Book  rates  must  be  amended,  or 

owners  must  be  allowed  an  occasional  vovage  off  reauisi. 
t.on  to  take  advantage  of  high  rates  of  freight  whereXse 
do  not  affect  the  .Allies;  for  in.stance.  a  freight  from  the 
Lnited  States  to  Spain.  Brazil.  Argentina,  etc. 

I  ncccmber  17.  MS.  p.  804. 
^  /•iiir/'Kiv,  DictmtKr  28   1916 

ship '"„'(;':""■  "'"'■'"'••  ''''■■  '"•<*•  f-  -  »«ount  of  ,he  elaborate  system  „f 
had  laT«e  pel'"CV'nf'',^hoV;tlH"XV':n';Vf''  'IT'"  ^,'"P"*"-^  I'-- 


l.'.rt  INfLlKNCK   DK    THE   ni»F.AT    \V  \H    I   ItiV    SIIII'PINr. 

The  ".amc  jnnrnal  charueil  ( .\iiKU'«t  i.*'',  It'lT.  pagf  .'>:il  »  tbtt  the 
(•DViTiimcnt  hail  imhiccil  shi|)<)v\iK'rs  to  itiitUr>{ii  cDst*  ani'iuntnijj 
to  niaii>  thou^iwl*  of  ixntniU  jwr  'hip  on  the  j)ronii<>«  that  a  irvt 
voy.iKC  at  current  r.itfs  wuuld  lie  allnwid  tlicni  in  order  t-)  rfi>>vcr 
the  extra  amount  >o  «li:^l)ur->cil.  "  Thii^^s  Ncenied  MniohajK:.  Intt 
what  ha|ii)encil?  Ihe  j;overnjnent  repiuliates  ihc  promise  ami 
retjui-itions  Iiuals  initnediately  tlicy  are  rini>hcd." 

The  little  Hook  rateN  iiad  an  el  .Ix irate  "Cale  proviilinK  for  clif- 
ferent  rates  of  iiaynient  lor  ve^«els  of  iliiTerent  s|ieed.  type  ami 
condition,  hut  mueh  complaint  am^e  from  the  application  of  the*e 
rates  to  particular  ships: 

The  director  of  Traiisporfs  has,  however,  now  liecn  jjii'lty 
of  an  even  greater  act  of  injustice,  as.  after  usinK  high 
class  steamers  of  1 1  to  i:t  knots  for  the  carriaKC  of  troops 
.md  horses  for  periocls  tip  to  twelve  months,  which  vessels 
were,  however,  not  previously  run  in  regular  lines,  he  has 
siuhlenlv  decided  that  these  Ixtats  must  U'  classed  as  common 
tramp  sieaniers  and  he  paid  accordingly. 

He  has  !aii!  it  down  that  a  very  ordinary  tramp  steamer 
•-'•i  year.,  old  an'  steaiiiinj;.  -t\\,  "•  knots  with  dilticulty.  is 
a  regular  liner  U-cause  she  has  been  running  in  a  regular 
line,  and  must  therefore  he  paid  for  at  the  rate  of  li's.  :ltl.  per 
ton  gross,  whereas  the  high  d.iss  nuMlern  steamer  with  a 
speed  of  say  1^!  knots,  which  has  rightly  Iwen  receiving  l.'>s. 
:Jd.  per  ton  gross  uinler  the  same  charter,  or  Hs.  :]d.  if 
requisitioned  in  Australia  or  New  Zealand,  is  only  entitled 
to  lis.  per  ton  because  she  is  a  common  or  garden  tramp, 
and  that  the  owner  must  repay  to  the  .\dmiralty  all  amounts 
received  over  anil  above  thi.s  rate.' 

The  High  Profits  of  the  Karly  War  Period 

Of  the  2-',0()(),(M)(»  tons  gross  of  British  shipping  ( .'t.'i.oOO.OOO 
tons  dead-weight)  Mr.  J.  H.  Welsford  -  says  that  approximately 

'  I'airfhy.  September  20.  1915.  p.  501.  fTliis  is  a  »trikinK  illustration  ot 
tht  point  made  in  Chapter  1  that  it  is  hard  tu  draw  ihe  line  between  tramp 
ar.il  lim  r  ) 

'  Ibid.  .March  o.  iW.  p.  4il. 


Mlrl»H    a)NT»Ot   AMD  OPKRATION   Of   KInrPINC  I -.7 

•i.-'  IKT  cent  wa«  irnmrtlialelv  rc<|ui»ili..nc(l  at  the  lUue  B.),»k  raici. 
Other  authority  Mate*  that  the  K<>vcrtiniem  wa^  oiK-ratinj;  |,;,'im» 
stea.ner*  h>  the  ciul  of  OctnUr       Ihi,  »«»  really  jiiM  u.nugh  f. 
Iir.Mlucc  the  .leMre.l  (by  »hi|H.wnerM  comlition  of  famine  v,  far 
a»  rates  were  a.tK-crncil  atui  !,-a.c  thr  owner*  eimiiKh  tonnage  to 
reap  a  rich  harvest.      Tlir  cnsuitiR  year  u a,  the  hey-<ley  of  Urili»h 
thijipinj;  from  the  »taiul|)..int  of  pro»it»— th«  richest  harvest  in 
.hipping  history.     I'or  exainple.  a  Mnall  company  in  ten  ami  a 
half    months    Miatlc    l.i:.    |kt    cent    profit*    on    itn    four    tramp 
*teamcr>.'     While  this  was  perhaps  unusually  large,  it   was  a 
year  «.f  great  profits  all  amun.l.  an.l  a  year  tlurin>,'  which  public 
animosity  toward  the  shii)owners  rose  to  a  strong  point.     Being 
islanders  intimately  c«nnecte<l  with  the  shipping  business.  an<l 
knowing  their  vital  tlependencc  upon  it.  the  news  of  shipping 
profits  went  to  every  hamlet  in  the  king.lom.     It  was  ei.sicr  to 
hear  of  the  great  profits  ..f  shipping  than  it  was  to  hear  of  other 
war  profiteers.     The  rising  prices  could  very  easily  and  naturally 
lie  blanicl  ujMin  tlir  sliipowner  whether  he  was  guilty  or  not.  «<> 
that  hi-  Iiccanu-  a  kind  of  national  scapegoat  for  the  whole  trilw 
of  profiteers.     Lloyd  (Jeorge  said  that  whenever  he  went  after 
any  group  of  laborers,  as  he  often  diti,  in  an  attempt  to  get  them 
to  work  lictler,  ,.r  to  .;ct  them  to  make  concessions  (or  the  public 
welfare,  he  always  ha<l  hurled  in  his  iceth  some  bitter  remarks 
alx)ut  the  undue  an<l  extravagant  profits  of  shipowners— why 
didn't  he  stop  their  |)rofits  too.^ 

The  .\s(|uith  administration  refused  to  take  formal  control  of 
the  shipping  of  the  country,  despite  many  requests  tliat  it  should 
do  so.  They  dM.  however,  make  many  indirect  efforts  that 
resulted  in  substantial  rate  reduction.  Shipowners  were  in- 
formally notified  that  •  they  didn't  take  moderate  rates  their 
lioat"^  would  l)e  reqin  itioned.  In  other  .ises.^  shipowners  were 
flatly  told  to  take  oats  at  Ss.  a  quarter,  or  the  boat  would  be 
requisitioned.  The;-  t.n.k  .'.s.  a  quarter,  which  was  much  less 
than  the  open  rate,  but  better  than  the  Blue  Book  rates.     Later 

'  Fair  play,  I  r^rtmber  i.5.  191S. 

Ih,d.,  FWetiibcr  21,  1<>16,  n.  958. 
'Ibid..  Novcmbtr  M,  1915. 


l.-** 


Ivri.fK.NiK   or    TIIK   0*e.*T    \\.\H    I  I1)>i    'Ull'J'INii 


watiif  the  iKi-ti^nti;  nf  imtK>rts  .ttiil  llirnUKli  llic  rrfuMi  dI  ticri)<ur4 
);r.ui)  ratii  wktk  kept  iIdwu  xitiii'tiinc^  .i^  imuti  ai  l*u.  |>cr  t|ii.ir< 
ter,'  In  N'oveinlirr,  l!'l.%,  «iii  Order  in  t  iHincil  j;a\v  ilw  |i.iaril 
if  Trailc  |Mi«ii  to  rri|UtiitU)ti  nirrchunt  >liip»  in  iHMs  of  cimr- 
(jrnc)  fir  Mk- larr.MiiK  "f  f'NxUtutl*  aii-l '<thfr  »vwr««i»r\  u|»|»Ur». 
The  fHiwrr  wa*  Id  lir  ixirii««'i|  l»y  a  ri'<|iiiiiti<>inti|;  cuniiiiillcr 
uhitli  had  two  ainin:  to  have  tonnage  availaUIr  in  imm;  of  necil. 
atul  "t"  prcvctf  frriKhK  on  ich  ciinm<Hliti<  t  fi  mU)  ri-.nijj  to 
piohiliiiivc  IcvvN.' ' 

lU  January.  t!i|.'>,  the  Aihnirnttv  wnt  catkii  ttx'  l.irci'M  ihip- 
MwiiiT  in  the  v\orlil,  nicnhatit  «ihi|f.  onl\  luinj^  lomnctl,  !i«t 
iliininj  tlif  \car  I'.'l.'  there  «a^  .1  'trails  iiurca'^c  in  lh«"  rciiuist- 
tionini;  of  iihip*.  In  N'ovctnlwr  the  net  nnnWier  a<Uli'<l  was  III. 
in  Dfi-enilicr  I ■-'!•.  while  !'>!•  were  ailiU'd  m  ilic  tir'«t  half  ■  1 
jaiuiar).  I'.'if..*  Thtx  were  iisiiall\  taken  in  the  l!riii>h  i»<)rt.. 
Thsnuide  the  ltriti«h  "hip  nnde«iralile  lwcau«e  no  charterer  knew 
when  a  prize  worth  a  fortune  would  Ik;  taken  au  iv  from  hnn.  ho 
that  in  some  eases  the  neutral  j;"'t  i»  -•"'  Ih-T  ccin  or  Itctter  viie 
than  British  vessels,  and  British  vessels  "hnnncd  the  I  nited  Ki.  ^• 
d  iin  whenever  they  could.''  Ihrir  i>|iporttn  iitr^  ''>r  avoidinj;  li. 
Inited  Kniijilom  were  ended,  hi  never.  In  the  re^nlation  lotc  n; 
I1>1.'»,  that  there  should  I*  no  more  iranKulir  voyages  w  Merehv 
the  I'riti'h  vessel  carried  a  iart;i  it  im  oue  nc-.itiai  i  in- 
other." 

By  the  end  of  l!»l.'  the  pressure  of  tik  national  need  was  Ikt- 
f^'innin^;  to  make  itsdf  felt  on  British  ship|iin>,'.  The  increase  '  f 
re«|iiisitionitig  at  Blue  l!«M)k  rate^,  estimated  at  "•"  jH-r  cmt  of 
total  hy  January  1.  r.»l<l.'  and  the  intrea-.e  "f  taxation  lie;,Mn  to 
show  tlietnsclves  in  the  value  of  Briti-h  shipping.  Tor  example, 
sister  ships,  the  one,  fVitish.  sold  in  Octoher  of  that  year  for 

'  /  .rr/i,'jv.  .\|iril  f'.  l'M6. 

■//■',/..  S.>M>mt)«T  18.  1<*I5.  p.  8()». 

'  llxd    Janii.iry   14,   1915. 

'  ^talir'n'it  by  L'lulrr- Secretary  .^l^■\'amara.  I  airplay .  January  J.7.  \')\(>. 
p.  UJ. 

■.I.  H.  Uelsford.  I  air  flay.  March  «.  1'^I7.  .ind  Sir  \orm.(n  Hill,  Secy 
Liorj"«>l  S    S    nwnrr>.    \««n  ,  l-airfhtx    >':itc!i  4.  l''I5.  p.  745. 

■//;,•  lu'r„.mu-   11  „rld.  rHcimLer  11.  I''15.  p.  745. 

'  I'airrUy,  Ueccml)cr  ^1.  1916,  p.  8'X.. 


«.'«1,'MM).   (ia-  nthn 


i.'llt 


i'KHKINN) 


'ilVml'mh'^'"'*'  *^""''  ^*'"''*"  *""'''  "*^  *"*'  ^'""P**^  '•' 


CJitu,vvu.^T.ON  AND  KmcE^tcY  OK  Si,,,.  Man.,o,c»,ent 
lUl.Vlftlll 

»y  the  aimimM  .,r  IlM«  ,h.  control  of  .hipping  «,.  ..,„^  ,„ 
t-o  .kparunen.,.  ,hr  A.lnnralrv    .nd  ,f.c  ll.Tr/.f  Trade   an 
;^.r..e  jpn-....,  con,m,„ce.:  .,..  s.„ppi„,  Co„.r.>,  oL^  te  I 

■mm,„„.      I,  „  no  «.,„,|rr  ,ha*   wi.h  ihr.r  five  head,  fhere 

.   I^rn  an  ,n.,,en,  demand  ,or  ,»„.  cnn,o,i,„„,„  „,•  ,,,,^,,.7'^ 

-d  .he  creation  of  a  Mn.i.try  of  Shipp.n,  which  should  '  ale 

.-..n,ol.da,e  th...  numennt,  and  inevi.aWy  ronHie,i„«  aJhS 

nnl'^Tnl'  'r',*'  *""'  •"■^'»"i'^"<'»  the  government  shipping    le- 
r  ment,  d.d  a  .rca.  u.k  dnrin.  .he  lir.t  two  yeaJT  o    ,  . 

»*  vra.her,      .y  comf^rn.^  the  .  o.nmercial  freight  movement,  a. 

.mo,   k.,ucn  jum,H-d   l..„„   ■  loo.rHM,  „.„,  ,o  s.,mm)0W). 

"    •^»-s»-  iVr      re  from  ;;.I(-().i><fo  »„  i'.iMtnoo    ii  t 

-     OO.Ooo  „,   4....HM)„0      ,„,    L-.,ne   from   4^  1    ''1'   ''''"' 
.  ,„.        .„  ,,.     .  '"   '"»»Pe  from  4.f).0(W)  ,o  TTO.Ooo 

;  "  \    ^".""'*  '""•      •  V-      '•.  addition  to  the  work  of  ,he 
tranche,  ..t  the  Uriti.h    .  U  rench  Government  en^ed    1    h 
>  r,c.  y  md.tary  wnrU.  ,he  supplying  of  the  armies  uh'T  ec"ired 
a^>o  the  movemen,  ..  vast  store,  a.  well  a.  ^rea.  numher  " 


The  .4  mat  cur  in  Office 
The  attempt  of  the  Rovcrnment  to  so  sud.lcnlv  chanRe  am! 
ncroase         actnmes  and  conduct  trade  in  .mprepare,!  place 
naturally  rr.Jr  ,,  i„  „,„ch  confusion  and  gave  rise  tcfmu  h  cr  ti 
c,.sm  covenng     >th  the  conduct  of  affairs  in  port  andX  on    a- 
t.on  of  sh,ps  u  sea.     In  the  creation  of  a  ne'iv  force  to  do  IhU 
'  Fairplay,  Oei.cmber  23.  1915.  p.  1084. 


!  '!*' ; 


i«i 


IfiO 


INKl-lKM  i;    OK    TIIK    C.RK.XT    WAR    UPON    Sll  IIMMNC 


ni'vv  wiirk,  llritaiu  *iilYcrc(l  from  two  of  the  universal  weaknesses 
of  mankind:  (1)  the  common  desire  of  man  to  do  sometliing 
he  has  not  practised.  This  desire  often  gets  humored  in  times 
of  emergency,  and  gives  people  the  chance  to  exercise  an  inherent 
egotism  which  makes  so  many  of  us  sure  we  can  do  the  thing  we 
never  did  I)efore,  the  thing  for  which  we  are  not  trained.  Thu.s 
tlieiirists  ami  talkers  first  come  to  the  front  and  get  themselves 
placed  in  positions  requiring  '  nowledge  that  only  experience  can 
give.  The  shipping  fraternity  of  Britain  s«.jmed  generally  sure 
that  in  the  early  days  of  the  war  an  unduly  large  numher  of 
inexperienced  persons  got  in  control  of  shipping.'  .\  .special 
correspcjntlent  in  the  Glasgow  Herald  says  ( March  :.'!),  1017,  page 
;iC): 

We  shall  never  he  ahle  to  estimate  the  amount  of  harm 
that  the  activities  of  the 'rash  amateur  ■  have  heen  permitted 
to  do  to  all  industries,  but  especially  to  shipping. 

(  L' )  Britain  suffered  from  another  of  the  inherent  weaknesses  of 
humanity  that  tends  always  to  cripple — the  sense  <jf  caste  superi- 
ority which  arises  from  officialism.  In  the  words  of  Mr.  J.  H. 
Welsford. 

Unfortunately  the  departments  formed  to  deal  with  trans- 
port matters,  owing  to  their  lack  of  experience,  the  over- 
lapping of  departments,  friction,  jealousy  and  other  causes, 
in  attempting  to  handle  this  big  fleet  without  the  cooperation 
of  the  individual  owners,  whom  they  treated  with  contumely, 
have  reduced  the  efficiency,  some  think,  by  r»0  per  cent." 

Ships'  time  seems  to  have  been  wasted  both  at  sea  and  in  pc  *. 


Port  Congestion 

Bad  congestion  of  many  ports  was  one  of  the  first  results  of 
the  necessary  ending  of  free  competition  and  of  supply  and  de- 

'  October  29,  1915,  the  Chamber  of  Commerce  urged  the  ciilarRement  of 
the  Ships  Licensing  Committee  by  the  "  addition  of  members  with  wide 
experience  of  chartering  and  the  management  of  general  trading  vessels." 
Lloyd's  \icekl\.  March  3.  1916,  p.  6. 

'See  also  tile  same  point  made  by  Sir  A.  Williamson.  Lloyd's  Weekly, 
November  26,  1915,  p.  759. 

•  I  airplay.  March  8,  1917,  p.  421. 


BRITISH    CONTROL   AND   OPERATIO.V   OF   SHIPPING  101 

man,!  as  controls  ..f  commerce.     This  arose  very  naturally    for 
war  trade  was  thrown  in  on  top  of  peace  trade,  and  both  ac^om- 
panKd  l.y  < hmmufon  of  man  power.     It  was  estimated  ■  thatTf 
prewar  loadn^g  and  discharRin.^  conditions  could  1^  restored  to 
ma,n  alone.  ,t  would  result  in  10  per  cent  increase  in  imports 
but  iTcnch  ports  were  the  scene  of  the  greatest  delays.  %he 
Uyerpool  Shipowners  Association  reported  at  their  annual  meet- 
.nf(  ( I-ebruary.  l-M..)-"  that  the  chief  causes  of  port  congestion 
were  ,1     shortage  of  labor  on  .,nays.  in  the  y.ul.,  andt   he 
adway  depots:   (2)   heavy  demands  by  the  .\dmi;alty  on  the 
crex..  of  mercantde  marme;  (:{)  absorption  of  tugs,  lighters  and 
other  appances  by  the  Admiralty,  and'railway  car.s'b/th  "':  ■ 

ior  s  oH  1    /-?"  "'  ""''"'"  '''''  ">'  «°— "'  •- 
pjts  ot  sugar;  (..)  mcreased  railway  traffic  not  memioned  bv 

the  shipowners  should  I,e  added  to  this  list.     As  illustration,  of 

sorne  of  these  claims.  Lloy,:.  IVcckly  (December  'rS.rpag 

....,  ones  the  case  of  a  shipowner  who  had  had  goods  bound 

or  hollami  m  a  waterfront  warehouse,  but  owing  to  the  lack  of 

.ghters    four   steamers   sailed   without   his  being  able   to  ge 

the  goo<ls  alongside.     At  Cardiff^  difficultv  of  handling  rail- 

aTthe'minr-'    r"'"^"  "^''^^  '"^  '"  ''''  ^''  ^"''  ^'"-^  *<"« 
gesLon.^  Commmees  were  appointed  to  advise  on  con- 

Some  of  the  ^pecific  steps  made  to  handle  this  situation  were 
h  construction  of  extensive  new  freight  sheds  at  Manchester 
and  London.  Perhaps  the  most  rev  .lutionary  single  change 
however,  was  the  establishment  by  the  Port  and  Transit  E.eS 
t.ve  Committee  m  the  spring  of  1910  of  mobile  battalions  of 
port  workers,  really  gangs  of  green  stevedores  who  were  shifted 
from  place  to  place  to  help  stop  temporary  port  congestion.  As 
h  s  contmued  >t  showed  the  possibility  of  interfering  with  the 
estabhshed  monopoly  of  a  trade  union,  and  the  proposal  to  n! 
large  the  dockers  battalion  to  10,000  in  Decem^r    1910,  was 

^'  Fairptay.  March  16.  1916. 

•  ''?J''''i,''f<^rkly.  February  S,  191S.  p.  94. 

rh'd    February  26,  1Q15,  p.   141. 

Ihd.,  Review  of  1915. 


If, 


INI  l.lKNCi:    OF    TIIK    CRKAT    WAR    r  •  !•(  \    SlIirM'INi; 


<i|)|)nsc<!  ill  v:iin  by  the  Notional  Transpurt  \Vorker<  IVilcraiinn.' 
Shortly  Ill-lore  this  a  royal  prodamalioii,  issued  umler  the  Muni- 
tions ot  War  Act,  had  ordered  tilasp>w  <lock  lal)orers  hack  to 
work  penditi^^  arbitration  of  tlio  i|ue-tion  (  f  hours  and  wafje^ 
because  the  dispute  prejudiced  the  niauufactirre  and  traiispmi  of 
Hiunitions. 

I  he  port  coufjestion  in  I-'rance  was  nv  rt  inevitable  than  in 
IVitain,  because  of  the  smaller  number  of  pert.-,  the  clu>iiij,'  of 
some  of  her  usual  trade  channels,  and  the  jjreater  necessity  of 
the  concentrptiiin  of  war  supplies  at  the  northern  ports. 

The  next  trouble  was  lack  of  re<^ilarity  in  the  trade,  as 
evidenced  by  the  fact  that  in  London  in  N'ovemlier,  IlM.'.,  the 
dock  workers  were  idle,  while  in  the  follriwin;,'  Januarv  twenty 
ste.iniers  were  waiting.  There  had  as  yet  been  no  system  e>tab- 
lished  for  the  correlation  of  -.hips,  trade  and  facilities.  (iovirn- 
nieiit  activity  in  trade  had  begun  in  Octolier,  l',iH,  bv  extcnsise 
imports  of  .su>,'ar  until  all  the  dock  facilities  of  the  kinf^dom 
were  crowded  and  ships  lay  in  harbors  with  no  place  to  put  their 
-ujrar.  Two  years  later  thcv  had  apparently  not  yet  leainei,  their 
ks-^on.  as  evidenced  by  correspondence  in  the  Dail\  Mail,  (juoted 
in  h'airphty.  Octoljer  ."•,  liUti: 


.\  steamer  with  "i.ooii  tons  of  coal  lay  idle  at  anchor  for 
twenty  days  waiting  for  a  berth  and  occupied  a  further 
seveiUeen  days  to  -'Iischari,'e  her  carj,'o.  Thirty-seven  davs 
in  port!  During  that  time  she  could  have  made  a  voyage 
across  the  .\tlantic  and  back  to  this  side  with  a  cargo  of 
wheat,  and  yet  people  who  cry  for  government  control  com- 
plain of  the  price  of  Jjread. 

There  is  i)nly  one  dock  with  a  (|uay  space  of  l,7"i'i  \ards 
at  this  port,  and  yet  the  .'j;overiiiiiem,  in  face  of  the  L;ro\vin;i^ 
scarcity  of  t'unage  throujL^h  loss  by  submarine,  mine,  and 
other  causes,  crowd  steamers  into  such  ports,  pruduciii-j  con- 
gestion, delay  and  loss  to  the  nation. 

This  is  only  one  example.  o\  one  port,  of  many  simila;- 
ca-es,  and  yet  when  1  make  vigorous  protests  to  the  Ad- 
miral;,   against  extravagant   waste  of    i'.ritish  tonnage,   its 

'  IJoydi  Weekly.  .March  7,  1916.  .ind  luiirp,,,.,  Ucccmb.-r  7.  I'JlO. 


Parliament. ,  '""•  ^'"I'«^* "'-•'-  "hI  Mfn.l^r  of 

1"  the  su,n,„er  nf  l-n:.  rhe  ...vernment  appcintecl  a  comfn.tte. 
■"  (.Ia.^.n.   to  ccx.r.iinate  rhe  „aval.  nnii.arv  and    -  >•   T-  il 
"H-n  s  ,„  ,h.  port,  ami  ...  inst.rc  that  the  p.,uers  Urcd;  L    f    ," 

ail  p.'rt,ev     A  shipowner  was  ,„ad,-  chairman.'      Tins  wa.  ,lnnl 
l-aus,.  a  s.„,i,ar  committee  ha.l  l>e.n  successful  a       "    '!?! 
""^  t>rM  ,tcp  „.  c„„r,ii„ation  was  urgcmlv  ,n  .««ri        1^ 
reaching  applicati...   .h.ch  has  since  LunZ^  """"'^  '" 

a:n.,ir ;:  ::::::;\:n:;u-  't?  ;;:  r  "-^'^^^  ^^--^-^ 
!::>;;;r:.r;r4?rs- '?:  -7.<^"«c„.ties  to  ..r. 

-f  his  vcssel-s  iif^.  a,Ki  toJw  '  "if."""  '''''^''  "'^"'^' 
time.     T.me  is  was  el  1  "'"'  '    -"*  "''''"-■  '""'"  '"  ^^''^ 

peace.  In  «d\  ^.  £  .J'  ""'  "r"  '^^^•'''■•''■""^">^  -  a. 
alm,.st  invariablv  Iv  he  Lss  ;f  .'"■  ''"''""^-  '^"^ 
"■an  the  shortest- in  rdertni-.  '''-'"^'  ''""''■''  ""''^'• 
mines   etc     utVii    "   "^''^'^  '"  ^'""l  flanK^r  trom  suhmarines 

Sv ;;  i-  i^' md™:;;.rs ';  rr','"""?^'^  ^'^^^  i-*^- 
;3tr:::;'-- frt-'""^ 

-  an-?h:;!^-;x^ran:,f-^ -^^^^ 

.^hall  he  hound  to  arr  ve  t'n'ethe.    ;     m       """-'  '^''T'"' 

port  can  handle.'      \t  presem    even      7   ""'  ^""'  "'  '^''' 
■M  present,  cxen  so  tar  as  concerns  the 

,  'i™  ■  J;iiuiary  4.  I9I7. 

would  i^^:^::z::::i^ir::i  !^  ^i^^&'^  ir  '^^-'  >-"  "^  -- 

reforms  must  In-at.  venous.     Sucli  is  the  stuft  again^l  whicl. 


lfi+ 


INFl.lKVfK    'M     THE    UHKAT    \\  .\H    I  PON     >lllI'riNG 


natiinial  rciuirements  of  the  Allies,  tliet  fm^  to  lie  no 
^ettlf'l  |»!iii  "f  >])ci:itinn.s.  One  or  lUnre  iiraiiches  of  each 
jjoveninicnt  .i]>|)e.ii  in  In;  chartering;  more  or  le^>  independ- 
ently "t  nil  tlu-  others.  The  result  i>  confu-ion  which  is 
I«il  tor  all  concerned — not  (|iiite  all,  a>  with  the  ministries 
•n  each  capital,  the  varions  state  railways  and  serniKoxerd- 
inental  nuuiition  works  all  hiilding  one  aj^'aiiist  the  other, 
lie  Ural  and  Japanese  shipowners  reap  a  ruh  harvest.  Ilav- 
iny;  fixed  iii-  \i--e'  nn  time-charter  at  the  hijjh  rate  re>ultant 
upon  their  had  orj^^anization.  the  shipowner  views  with  ecpia- 
ninnty  the  difticultif'  (if  the  charterers  which  arise  from  the 
same  canse.  when  she  arrives  at  a  port  already  more  than 
full  of  ti  nfia.i;e  ail  n  dly  rnnninfj  for  the  same  principals 
hut  all  chartered  thn.ujjh  ditTerent  channels. 


/ 


liffjcii'iicy  >'/  Sli'pfinii 


The  journals  representing  the  shipping  interests  fairly  reveleil 
in  stories  of  ofllcial  uietiicu-ncies  with  shijjs,  and  make  clear  to  ns 
why  IJrltain  had  to  reorganize  her  system.  R.  P.  Houston. 
Menibp"-  of  Parliament   criticized 

the  way  in  which  reipiisitioneil  ships  had  heen  wastefully 
employed,  and  tnentioned  that  a  lo.'MiO  ton  liner,  for  which 
the  government  were  paying  tio, .">»)(»  a  month,  had  been  ly- 
ing in  the  .TCgean  Sea  for  some  time  accommodating  about 
4<»  military  and  naval  ot'ticers.  It  was  popularly  known  as 
the  L'niied  Service  Club.' 

Again 


there  was  great  waste  going  on  in  the  Transport  Department 
in  connection  with  sending  unsuitable  tonnage  for  certain 
purposes.  I'or  instance  a  line  jiasseiiger  steamer,  carrying 
I'OO  passengers,  all  the  accommodation  having  been  jiracli- 
callv  liooked,  and  she  being  ready  to  load,  was  taken  by  the 
.Admiralty  and  sent  out  in  liallasr  to  Chile.  She  was  an 
unsuitable  boat  for  the  purpose,  burning  considerably  more 
fuel  than  an  ordinary  cargo  steamer,  and  yet  she  was  sent 
the  whole  of  that  distance  in  ballast,     .\nother  vessel  en- 

ri.,yd's.  Xovemhcr  5.  1915,  p.  709. 


BRITISH    CONTROL    AND  OPERATION    OF    SIIIPPIX,,  1(1.', 

Ka«ecl  in  ore  tra.le.  which  was  also  take,,  „ver  i.y  ?hc 
A.lm.ralty.  was  sen.  m  ballast  the  whole  wav  in.m  slin 
to  a  „.,rate  port  ...  get  a  load  of  n.trates.  She  7.,  w  " 
an  unsuitable  vessel.  Un,  small  for  .he  tra.le 

We  had  these  vessel.,  guinjj  out  in  Iwllast  a.  a  time  when 
we  knew   that  .he  ArKcn.ine  railwavs  were  hunj  m^    'r 
n.al   and  were  be.n,  con.pelled  to  paV  n.uch  hi  die'";  ^«h  I 
tor  the   few   vessels  available.      If   vv».   had   had   nracfica 
pe^^lc   managing  this   bus««ss.    an.l    ,f    thes<-   pL'd     S 
km,wn  the  needs  o,  the  AUm,niJty  in  advance,  ^l-v  oS 
have  Ia,d  out  the  t..nna«e  in  such  a  wav  *s  to  aTu.d  ,S 
wasteful  extravagance.'  " 

In  the  winter  l!n:.-in.  „,th  fre.ght  rates  higher  than  ever 
before  .„  the  h.story  ot  the  uurld.  seventy  go„d  .,eamships  were 
allowed  to  get  caught  ,n  the  ice  and  spen.l  the  w.nter  at  \rch- 
angel  .n  the  w.n.er  of  liu.i  a  shipowner  rep^.rted  '  that  his 
I^ich  h  i'T,""'^''  government  rec,uisi„„n  for  4.7  davs.  of 
vh,ch  she  had  lam  m  port  '.iT-.l  days,  in  one  case  with  a  cargo 
of  coal  so  long  unloaded  that  it  tired  from  spontaneous  a«,- 
bustion  Another  glaring  case  was  the  much  talked-of  episo<Je 
of  the  tankers  ht.e.l  up  for  troop  transport  •  but  not  used 

thnt'h^r-      >  '""■''•'''"'''''  "^  '"  '^  '^'  ''°'y  °^  'he  steamer 
T2t    "■;'  t'""u '""'  ''''^'''  *"  ^'''  '^f«^^  ^he  finallv  got 

S  -rr ''' '-''''  °"  --''''' '-  '''-^^'  ^'^  --  - 

I  {.'n'd'j,  November  26.  1915,  p.  759 
^  hairplay.  February  24    I'M6 

of  ferlaiT  ''Ut  F;{,';?r';i'."isrt,';!°„"irt"'w^°""""'"  -  -"^  '«•" 

by  the  Admiral! V,  and  a,  \rreT,llll\l!.}*3  fj'  ♦»"''"'  ""f  requisitioned 


it  was  norumiithe  follow  „«X.K::,^S.rK  ''^^  T'T^'^^  ^-^ 
the  owners,  never  having  been  pmt,  l„v  ,  ,ef  .M^  *"'  ''?'"''■'*  •'a'^'*  «" 
■nterv.l.  That  lit.lr  transact'on'^mnlM  ave  cost  ^^'■'^'^'''""'^^■"  "'  "-e 
another  ak.ut   £800,000.   .  \  Tmail   «^L  "        ^  country   one    way   or 

coal  to  an  I-ast  Cast  port.  andunlTr  hnien^rtn?"".  J'^1""'»'°"^d  «"  carry 
to  accomplish  two  coastinR  trips  Tnnrecifel^l^r  ''"''' ■'>'''«^"^  '*'"■  "lanaffed 
she  usually  complete,!  five  when  run  b    her  ow    oCr  """  "V"'="  '"  ^^^'^ 

»ent  ,n  baH,«>  across  .he  ^^U^'    'l^jfl^Tu^fT^it^^^^t; 


Hi)) 


ISKLlENfE    OK    THE    UREAT    WAK    LI'ON    SIIUTING 


loaded  with  a  carj,'o  of  coal  in  this  country  for  Archangel, 
ami  tiu-  nccf>i>:try  insurances  were  effected.  No  sooiur  was 
thi-  iloiie  than  the  authorities  altered  the  destination  to  the 
Mediterranean,  and  re(|uested  the  owner  u>  cover  the  altered 
risk.  This  he  did.  when  the  authorities,  who  evi  '.ently 
ima^;ined  th.it  they  were  eiiKaged  in  a  f,'aine  ot  j;eneral  post, 
decided  next  to  send  the  Injat  to  the  W  hite  Sea,  and  notified 
tile  owner,  who  had  oidy  just  time  to  chan|;e  his  insurances 
v\het'  the  vessel's  destination  was  once  ajjain  altered  to  the 
Mediterranean,  and  then  instructions  were  again  received 
that  she  was  really  to  go  to  .\rchanj;el  after  all.  L'ltini.itely. 
when  cvcrythinR  was  arranfjed  and  the  Ixjat  was  alnitit  tu 
sail  lor  tlie  last  nainetl  destination,  after  Lloyds  and  the 
coni|)ans'>  nfhces  were  closed,  the  authorities  decided  to  or- 
der her  immediate  dispatch  to  the  Mediterranean,  e-xpressiiij; 
their  unbounded  surprise  when  the  owners  informed  them 
that  this  could  not  he  done,  as  it  wouUl  Ije  impossible  to  cover 
her  lur  the  voyage  in  the  absence  of  underwriters.  In  the 
end.  ,md  after  the  vessel  had  Ijcen  delayed  for  a  number  of 
day>.  the  necessary  insurances  were  in  fact  carried  out  and 
the  \essel  proceeded,  .After  such  an  exhibition  of  business 
capacity  it  comes  almost  as  an  anticlimax  to  hear  that  tlie 
boat,  not  being  fitted  in  any  way  for  an  I'astern  voyage,  was 
sent  through  the  Suez  Canal;  that  being  unsuited  for  such  a 
purpose,  she  was  utilized  as  a  tug.  and  that,  .ilthough  ever\- 
Ixidy  outside  the  great  commercial  departments  of  state  is 
not  permitted  to  forget  that  toimage  is  urgently  wanted, 
she  has  at  the  time  of  writing  still  part  of  her  original 
cargo  on  board,  and  will  not  be  free  until  probably  next 
month.' 

It  is  true  that  in  the  spring  of  lUlCi  even  so  good  an  enenn  of 
ofHcialism  as  J-airf>lay  reported  that  tlie  mistakes  in  the  govern- 
ment operation  of  steamers  were  growing  less,  but  plainly  there 
wa-  need  of  reorganization,  which  c.ime  with  the  creation  of  the 
Miiiistrv  of  Sliipping  in  Dtcemher,  r.thi. 

Be  fore  it  came  about  the  licensing  of  all  voyages  except  those 
in  the  coasting  trade  had  been  bet,'un,  liy  order  of  council,  March 
1,  l'.>\i'<.  In  May,  1!M.".,  the  licensing  of  coal  exports  had  been 
I'cgnn.-     Thi-  reduced  the  price  of  coal  from  J4  to  14s.  per  ton. 

'  I  nirflaw  Si-ptcmbi-r  21.  1916.  p.  ,W, 
= //...vrf///i-.-/W.v,  August  16.  1915. 


'^"iiiKKxrioN   ,,K  sriii-i'iNr.        lti7 
steamrrs  ha.l  to  cn.ss  ,h.  Channel  .o    \     .     f  Z       '  '"'"•' 

earlv  „,o„.hs  of    "  ".^     '         'rr""'   '  "'"""""■       '"   "^^ 

CRK.T,0N    .NT.   U-0«K   OK   TMK    .M..V,.STKV   OK   Sn,...,NV. 

N.e  steadily   increasing  p.,wer  that    had   In-en   .ive-,    ,     ,S. 
various  commttees  Mich  m  fh..  i;,.«.,  .  ^  *     '^"^ 

In   the  creati..n  of  the  Ministrv  nt  S  ^.^'^''^-'''I'er.  Um;. 

»r;T;  ;■;:;'  'S7:;;;*"'', "-  "■'*''■...""«  .ra 

:/6^'.^^.i[;h3!'',g^r'"''"'^-'9'5.p729. 

Of  the  firm  of  .Maciay  &  Mc  Anrfr-u. 


iii 


HIS 


IMl.l  INti:    OF    TIIK   (iREAT    WAK    I  I'K.V    SIIII'I'INC 


Mr.  Miulay  \\a>  acccptcl  I.\  ihc  jthippinj;  iratcniity  as  the 
answer  l.>  their  re(|iieMH  for  unity  ami  a  practical  man.  Me 
issiieil  an  n|R'n  call  that  the  pnlilic  ini|jht  inform  him  of  inetVicicn- 
cies  in  the  service. 

Tlie  Controller  of  Shipping  will  con>i(!er  it  a  favor  if  ^U}ck 
authorities,  steatiiship  owners  and  iaix.r  organizations, 
through  their  representatives,  will  advise  him  from  time  to 
time  of  an>  .letentions  an<l  delays  in  harlH)rs  at  home  or 
a!)road  from  .my  cause  whatsoe\er  which,  m  their  opinion, 
mifjhi  l>e  otniated. 

He  then  went  on  to  |M.int  out  that  this  had  onlv  come  after 


we  h.ne  l»een  at  war  for  two  .md  a  half  years,  and  tonnaj,'e 
has  Icen  wasted  in  a  prorlijjal  way  practicallv  the  whole 
lime.' 

Within  six  months  after  hi;,  appointment  f.loyd's  U'cfkly  pointed 
out  ;  .May  ^,  I!»I7)  that  the  inethciemy  charnes  in  the  operaticm 
of  shippiuR  were  declining. 

Mr.  Maclay  instituted  two  drastic  changes  in  jMilicy:  (  1  )  he 
asked  for  a  heavy  reduction  in  imports,  which  was  shortiv 
granted  hy  the  government,  althougli  it  had  been  asked  for  by 
the  (ilasgow  shipowners  a  year  lief-ire.'  M  the  time  of  the 
institution  of  the  changes,  it  was  ;,'iiierally  recognized  that  many 
commodities  could  Ik;  spared.  Aloii-  with  the  restriction  of 
imports  Mr.  Maciay  created  a  i)riorit\  committee  to  deal  with 
restrictions  in  shipping.'  (2)  foiitn.ller  .Madays  second  hig 
move  was  to  greatly  e.xtend  the  reijuisitioning  of  Hritish  shipping. 
When  he  took  office  alxjut  half  the  a\ailal»le  tonnage  v.as  under 
requisition  hy  the  state.  The  great  majority  of  these  vessels 
were  tramps,  the  liners  with  feu  exceptions  remaining  unrequisi- 
tioned  and  running  under  license  in  their  ordinary  trades.  In  the 
course  of  a  few  months  the  ministry  hroiight  practically  the  whole 

'  /  .iz/y/iiv.  l\lini.iry  1.  1917,  p.  178 

"  Ihid..  laiinarv  .7.   1916. 

'  Olasyoz^-  ll.-raUl,  Dettiiiber  Jy.  1917.  p.  J6. 


'•r  H.r  Rri.iHh  .M^ean-RoinK  mercantile  marine    liner*  «.  u.li 
•endecl  r..„,r«|.  ,hc  Kovernn.ent  .an  al.le       re<lireL^       ,  T 

Riven  eon„a.e  .^s  :;1;  t::;^;::.rt.;:r^^"  -""  '^: 

<hc  .hips  .iumselvcs  was  increase   ',  esc    hV      "^''''"•'  "^ 

-"-  .-f  .he  smaller  s,«ce  re.,.::'  f:  ;;;x;':;:r  '"'''''■  '*- 

How  r„K  M.N.sTRv  OP  SH.rn^a  Opkk.tku  Sh.hs 

the  actual  methcnl  shows  that  il   mn  /  Kxammati.u  ^f 

trol  than  of  operation       it  J nrrcn/rT  "  '"''"'"  "^    '"• 
Handle  .chava.ma.o.:C^:ri::r:r:r'' 

steamships.     It  is  eq.,allv  trt.e  th     tl  e  st.r.    ''"'""   '"«" 
any  orKanization  rapal.le  of  workiic'   hf !     ""  '""  ^''''''^' 

the  ships.  """anueered  the  old  organizations  that  ran 

po^or:,X!^:Z^t^  --'  trades,  committees  con,- 

under  di^tin^t^'lS'^.c   '^  tSti::?^?..!;?^  /'^""^" 
Indian  Conference    Me<lit,.rr,\,„      /•     /     ^^*^  Conference 

these  conference.rthe       Sr^o^^^  '''•  ■''"''  "^ 

.„    ,.    „.  •M>nistr>  of  Sh.ppmg  issue  directions 

i-loyds  llr.-Uy.  May  18,  1917.  p.  5. 


170  INtLI   ■  \(  t.    (IK    Tlir    <.B     \r     U  \H    t   I'liN    illlri-IN'C 

ax  to  tin  iiatiiri  iiiul  <|iiantitir<t  i  Hie  «c>«i.U  to  Iw  carrinl. 
\II  ilct.i  ^  arc  kit  t«i  ihi  maiiaKcnuMit  >ii  the  itutiviilual 
liitv  11.  !i  traiiip*  anil  liw^  art-  |i,ii.l  IMitc  lUnik  ratf-  ■•< 
h»r»-,  arul  all  frri|;tif>  are  acc()iiiili<|  t'l  r  |o  the  ];i)vcnmicnt. 
Katf-  "I  irci-lit  iiii.jcr  t!u-,f  iniiitith.n.  ran  ii..t  k"  hiijlui 
tlwin  (li(.  ;  •nitu'iit  are  pnitarcil  It.  alUtw  ilK-m,  liiif  mcr- 
chatit^  can  'iiJy  «lii|!  >uch  artiiU-*  a*  arc  c  iii^iulcrril  ctH-nlial 
fur  tbf  i(nintr\'>  rfi|iiircmcii!  Tlurc  is  C'>n^f|ticnlly  no 
(')m|)Ctitiun  Iwtwccn  xhipiH'r^  •  r  lu-tv\fiii  one  market  ati«l 
ani.thcr.  and  luniiaRc  i*  (lircclcil  r..  when'  it  i»  m«>*t  wanle*!. 
'I  lu-  inacliiinTy  exi^tin^-  for  this  c>im|itcte  contrnl  oi  shippiiiji 
is  naturally  vast.  In  the  suninii'r  nf  !!»1T  aluuu  in.iMto  ^»u- 
pU-  vviTf  einplou'il  in  the  London  oHicc!*  of  the  Ministry  of 
Shippin/,'.' 

Althon>,'h  this  machinery  may  lie  vast,  it  i>  simplicity  itself  in 
comparison  to  the  actual  task  of  rimiinr  the  vcsscU. 

\\  ith  regard  to  the  tramps,  thi  proUIcm  and  the  method  ditTer 
in  part  from  that  used  with  Imers.  Some  of  the  tramp-  that 
ai.  d.iing  civil  work,  such  as  carryinj;  >;rain.  siiRar.  nitrate,  are 
operated  as  of  yore  liy  shipping  lirms  who  know  how  and  act  as 
aRent-  mr  the  rransjK)rt  Department.  Hut  the  Transport  Depart- 
ment ot  the  .\dmiralty  has  lonj,'  oj>erated  ships,  and  the  British 
tloverimietit  is  now  o{>erating  a  part  of  the  many  tramps  under 
its  contr.  I 


They  are  In-inp  worked  dircctlx  hy  the  Department  of  the 
Ministry  of  Shipping.  Carj^oes' are  arranged,  loadcil.  and 
•lisihargcd  entirely  under  government  orders,  while  the  man- 
agers or  owners  simjily  attend  to  the  provision  of  a  crew, 
stores  and  general  upkeep  of  the  steamer. 

The  Xnyal  Sea  Transport  ISraiKh  provides  for  the  car- 
ria^'c  of  milliiMis  of  tons  of  licpiid  fuel  and  coal  a  year,  its 
co'Ucr  section  alone  employing  hundreds  of  vessels  and 
handling  a  monthly  average  of  well  over  a  million  tons  of 
coal.  In  eight  months  of  1!>1T.  the  Military  Sea  Transport 
Section  moved,  in  round  figures,  l.ooo.ooo  people.  li'.tMM).- 
OUO  tuns  of  St  )res.  ;i(Ki.(MM)  ruiimals.  and  lt)(».(KM)  guns  and 
vehicles.     In  practicall;    t>u    same  period  the  Commercial 

'  Ghstiox-  Herald.  Decemb  t  ^'o    "J17.  p.  35. 


nranch  pr..v..|e.l   f,.r  thr  !  .adinR  „i  m.llion*  ni  „,„,  „r 
f    iX;'  "h"'  """  ""•  ""''*^'  l»)"«'^  'I'x.  metal,,  am 
a  .natirr  ..f  fact.  ucH  un  toward.  l.l.O(M».iMm  ton,.' 

•n.i,  «..rk  1,4.1  I.,  Ih;  .l..nr.  a,  .lid  n.uch  of  .he  civilian  work  al*.. 
""•Icr  .h.  h„nu,,.„u  ..f  .iMr  cnvuv  ^Mtm.  wh.ch.  a  Uri,,,!,  ,hip- 
uw,«.r  re,K.r,s'  have  rrM.I.e.!  ,,.  .  ,.da>  ...  js  ,^r  cen.  in  .imc  .  „ 
thirty  iKirnn.lar  v,.yaKe*  in  c..m|«.ri»,.n  t..  similar  v..yaKc.  .1  .he 
simc  vessel,  without  the  .r..ul,lc>  ..f  o.nvov 

Thr  man>   .null  u-..d,  ..f  ,|,.  I'.riti.h'oaMinK  tra.k-  were 

w,.h  ,lK-,r  ,„.rk.  «,ch  a  cmplcx  ,ha,  ,he  «.,vernmen,  fr.m.  ,hcer 

lear  ..f  .Icta.l.  ..f  ,he  j..|,  |..,  ,h„„  al..„e  when  it  t..,k  shipping 

cngaKe.!  ,n  ,he  ...e.^n  trade.     1.,,,  a.  early  an  lUin  th.-  JalJ, 

a.l  U-K'un  U,  take  a.K|antaKr  ..f  the  si.uati.m  l.y  putt-u,  ,heir  rate, 

I.Mt  fr.,n,  nrmsl,  ,„.r,  ,.,  (H>rt.'     Thi,  unw..ntc.l  a,ul  In-fure  »n- 

htar.l-..f  cun.ht..,n  wa.  na.ttrally  confu^inp  „.  the  railroa.l  >iti.a- 

•"".  an.l  accur.l.n«ly  the  Shipping  G.ntr..ller  ma.le  a  rather  Z- 

a.ol  announcement  •  setting  ma.ximum  rates  in  the  Mritish  cast 

r.  .le,  for  the  carnage  ..f  the  raw  .naterials  fcr  iron  making,  and 

ititimatcs  that  other  rate  c.nitroU  will  follow. 

N'ationau2ation  of  the  Hk.tism  Mkrcant.le  M.xr.ne  ^^,„ 

ShIPPI.Nc;    Kl'SINESS 

It  H-ems  that  it  woul.l  l,e  .liffic.lt  to  figure  out  n.anv  more 
contx.  .  that  the  Hritish  Covernment  mig?:,  enforce  .L," 
nntish  ships  a,i.Uhipp,ng  husiness.  which  for  the  present  have 
heen  nationaiiml  ,n  o,K.ra.i..n  an.l  in  par,  in  ownership  Mr  T 
I  ..tterson  J.^rdie.  Chairn,an  of  the  Clyde  Steamship  Owners 
A.vsociation,  and  meml.er  of  th,-  .overnmenfs  Ships  Licensing 
Committee  n.  an  ad.lress  liefore  his  association  early  in  1917 
snmmarue.l  under  thirteen  heads  the  very  extensive  controls  thai 

;  Ibid..   April  27.   IW,  ' 
Ibid.,  January  J,   lyis. 


mttm 


i: 


i.Mi.iKNti:  or  nil;  crkap  war  rrox  siniTiNo 


wcru  ill  f,.rco  tun  iimiuIis  after  Ship[.inj,'  Controller  Maclay  was 
.'ippoititt'd. 

It  i>  advisahli-  that  I  should  Ihti-  n-capitiilatc  some  of  the 
controls  over  Mritish  shipjiinj;  institnted  by  the  government 
wliich  have  heen  in  force  dnrinf;  the  past  year,  in  order  to 
show,  to  some  decree,  the  conditions  Mider  which  onr  mer- 
cantile marine  lias  heeii  wtukinj;: 

(a)  l-"ifty  ])er  cent  to  sixty  per  cent— emhracinR  every 
tyi)e  of  British  mercantile  shiji— is  under  refpiisition  t)  the 
government  and  employed  in  Admiralty  and  militarv  service 
at  Mine  I'.ook  rates,  whicli  admittedlv  are  the  very  essence  of 
limitation. 

1 1) )  All  ships  for  the  carriage  of  sugar  cargoes  and  Aus- 
tralian wheat  are  put  under  recpiisition  and  paiti  fur  at  Blue 
Book  rates. 

(c)  Freight  limitations  have  been,  and  are,  in  force  as  far 
as  practicable  per  British  steatners. 

( d  )  All  refrigerated  ships  and  oil  tankers  are  operated  on 
government  account  and  at  fi.xed  rates. 

(e)  .\1I  regular  liners — not  rei|uisitioned— are  under 
obligation  to  carry  a  (i.\ed  proportion  of  cargo  at  ti.xed  rates 
of  freight. 

(f)  Cargo  steamers— not  requisitioned— are  directed  to 
perform  specific  vo\ages  and  to  transport  specific  cargoes  on 
fixed  terms  and  conditicms. 

(g)  Xo  British  vessel  over  ".(Hi  tons  gross  register  can 
proceed  on  any  voyage  without  first  obtaining  a  license  for 
the  specific  voyage  intended.  Here,  again,  control  is  the 
order  of  the  day,  because  licenses  are  refused  by  the  Ship 
License  Committee,  unless  the  particular  vovage'is  deemed 
to  be  in  the  best  interests  of  the  national  requirements  and 
those  of  our  .\llies.  Shipowners  throughout  the  United 
Kingdom  know  only  too  well  Ikju  licenses  have  l)een  refused 
for  legitimate  trading  on  many  occasions,  and  have  accepted 
the  Licensing  Committee's  decision  without  demur,  knowing 
that  it  acted  solely  in  the  best  national  interests  with  the 
knowledge  it  possessed,  and  that  national  interests  were 
supreme  and  paramount  over  all  individual  or  other  interests. 

(h)  .\  certain  proportion  of  our  mercantile  marine  is 
placed  at  the  disposal  of  the  Allies  for  their  emergent  war 
demands  at  Blue  Book  rates. 


nRITIMI    CONTROL    AND   OPERATION    OF    SHIPIMNi;  173 

(i)  The  povtTnment  has  taken  over,  arbitrarilv,  as  emer- 
gent (leiiiands  arose,  al)s()lute  possession  of  some  mercantile 
ships  huildinj,'.  or  at  work,  most  siiitaMe  for  i's  requirements, 
regardless  of  shipowners"  private  interests,  and  left  the  latter 
to  accept  its  ideas  of  price,  or  arliitrate. 

(j)  Shipowners  having  ships  building  even  under  prewar 
as  well  as  postwar  contracts  have  had  to  pav,  owing  to 
increased  wages  and  costs  of  materials,  substantial  sums  in 
additum  to  their  contract  prices  to  enable  the  ships  and  their 
engines  to  be  completed.  As  regards  these  new  vessels 
which  have  no  prewar  datum  line  of  profits,  they  are  only 
allowed,  under  the  new  Finance  Act,  i.  per  cent  profit  on  the 
capital,  and  4  per  cent  on  the  first  cost  of  the  ship,  which 
is  an  altogether  unsound  and  unremunerative  basis,  and  has 
effectually  prohibited  the  building  or  acquisifio  bv  private 
enterprise  of  further  tonnage  at  existing  inHatcd  prices,  at 
a  time  when  additional  British  ships  are  an  urgent  and 
clamant  necessity. 

( k )  All  shipping  contributes  to  the  state  fiO  per  cent  of 
any  excess  profits  earned  over  the  prewar  standard,  plus  os. 
per  pound  of  taxation — or  in  the  case  of  new  vessels,  the  0 
per  cent  standard  on  capita!— after  allowance  of  4  per  cent 
depreciation  on  first  cost,  which  has  for  years  been  the  basis 
allowed,  and  as  shipping  revenues  are  derived  and  profits 
earned  principally  from  foreign  countries,  all  revenues  to  the 
state  in  the  shape  of  taxes  from  British  shipping  constitute 
a  material  contribution  to  everv  .nan.  woman  and  child 
throughout  the  United  Kingdom. 

(1)  Every  British  ship  has  to  conform  to  certain  regula- 
tions necessarily  imposed  in  these  abnormal  times  upon  them, 
which  add  materially  to  their  working  cost,  as  well  as 
lengthen  the  time  on  (their)  voyages,  which  lessens  their 
efficiency  and  carrying  power. 

(m)  \o  British  vessel  can  be  sold  or  transferred  to  anv- 
one  except  Britishers.' 

Soon  after  coming  into  power,  the  Controller  extended  requisi- 
tions to  virtually  all  British  vessels,  and  the  unrequisitioned  liners 
which  had  been  ordered  to  hold  a  share  of  their  space  for  govern- 
ment disposal  each  voyage  saw  the  percentage  gradually  creep  up 

'Fairplay.  February  IS.  1917,  p.  J07,  also  .Uaniic  Revieu:  July,  1917. 


in 


IMI.Cr.Xl  K    ()|-    TIIK    (..      AT    WAR    rPoN    SlIIPIMM. 


from  10  to  Ji).  to  :!0,  to  lo,  to  f,o.  to  so.  until  with  the  hcKinniiiR 
of  I'.'lx  ill  most  services  HKt  per  cent  of  the  liner  space  was  on 
government  order. 

To  make  the  control  even  more  tiRht.  Hritain  was  not  content 
to  let  even  one  Britisher  sell  a  ship  to  another,  lor  an  Order  ii. 
(.'niiiici!  published  in  tlie  London  Gaccltc,  February  Itj,  I'.ilT, 
states  that 

A  person  shall  not  without  permission  in  writiii},'  from 
the  Shipping  Controller,  directly  or  indirectly,  and  whether 
on  his  own  U-half  or  on  l)elialf  of  or  in  conjunction  with  aiiv 
other  person,  pnrciiase  or  enter  into  or  offer  to  enter  into 
any  agreement  or  ;iiiy  iiej,'<)tiations  with  a  view  to  an  aj^'ree- 
nient  lor  the  piircha>e  of  any  ship  or  vessel. 

A  little  later  on  it  w:.s  enacted  thqt  no  British  ship  should  be  sold 
to  a  foreifiiier,  without  the  Cdisent  of  the  Board  of  Trade,  for 
three  years  after  the  war.'  Then  further  to  clarify  the  matter  of 
sale  of  ships,  the  above  mentioned  regulation  of  February,  litlT. 
was  amended  -  to  make  it  clear  that  the  purchase  of  shares  in  a 
ship  or  ves.sel  or  any  siock,  debenture,  or  other  security  by  which 
a  person  might  gain  control  oi  a  ship  should  be  construed  as  the 
purchase  of  the  ship  itself. 

February  1.".,  Ill  is.  an  Order  in  Council  amended  the  Defense 
of  the  Realm  i^egulations  by  providing  that  every  contract  for 
the  chartering  of  British  ships,  and  every  contract  made  in  the 
United  Kingdom  for  the  chartering  of  any  -hips  not  British 
must  contain  provision  making  the  validity  of  the  contract  con- 
ditional on  approval  of  the  Shipping  Controller.  It  would  be 
difficult  to  see  how  the  dri\er  of  a  motor  truck  in  the  Quarter- 
master's Department  of  the  army  could  be  more  subject~to  gov- 
ernment, more  a  part  of  the  government  machine. 

Shipping  as  a  Source  ok  Revenue 

It  has  l^en  said  that  Britain  has  used  her  shipping  to  reduce 
the  cost  of  living  within  the  F.mpire,  and  has  sent  her  ships  out 


'  rairplay.  October  18.  1917,  p.  65-1. 

'  U.  S.  Commerce  Reports.  February  14, 


1918. 


BRITISH    CONTROL    AND  OPERATION    OF   SHIPPING 


r 


as  tax  gatherers  to  l.rinj;  revenues  from  foreign  lan.ls.  Roth  of 
these  statcnents  savor  stronRly  of  the  truth,  as  evi.lencci  by  the 
sutemcnt  of  Mr.  J.  H.  Welsford  (/w/./ay.  March  s.  ,.,,7.  page 

by     he  R.ncrnment  today,  would  earn  at  the  rates  «hich 
neutral  sh.pp.ng  ,s  obtaining,     l-ron,  which  i,  will  be  d  ar 
hat  the  shipowners  contribution  to  the  state  in  services  can 
be  conservativelv  valued  easilv  at  f:!00.(M.o..H.o  per  annum 
whde.  „,  addition,  during  the  last  fifteen  month's.  ,   "  c  ,": 

lion"^°unds"  ''"''  •"■"'^'^  ''^'^  ''*^^"  "^"'-  ^'"^  '^"'""•'■•'  -■•- 

Such  income  as  shipowners  may  get  is  still  further  subject  to 
income  tax.  Even  further  than  this  the  shipowners  claim,  as  a 
grievance  that  the  government  itself  has  been  in  manv  cases 
makmg  the  ,l,rect  profit  by  charging  more  for  the  use  o'f  ships 

iTr  "  dmitted  •         "'  '"  '■'P'"^^^"^'"^  '^'  ^^"^'PP-^  Control- 

Ai'res^f!?''l  !'""■  T""'"'  '.""^''"^  ""  "'^  '^^^'h  at  Buenos 

ch'rce      s^n'-?°?V''''  '^'''"'"^  '^>-  "'^  R<^vernment  to 
charge  .,  s  to  ..2s.  (.d.  per  ton  on  government  cargo  and  as 

nlfses'^the   :■  P''  '"r"  '''^''  ^"'-  '^'^''■'  '•'"''  commercialpur- 
poses.  the  steamers  bemg  under  requisition  and  the  owners 
only  recennig  payment  at  Blue  Book  rates,  any  profi ts  ac 
crumg  gomg  to  the  government.'  ^  ^ 

And  again  Fairplay  points  out  editoriallv  (August  23.  1917.  page 

It  is  obvious  to  a  child  that,  inasmuch  as  the  government 
pay  Bntish  .shipowners  only  Blue  Book  rates  an.lcl  arTful 

W  BK,r  f  'r'r  ^"  "--^-P-^^-  -i-l  variou^^ra^' 
above  Blue  Book  rates  on  our  imports,  and  full  rates  on 

'  Fairplay,  .-Migust  16,  1917,  p.  270. 


J70  INKI.l  r.MK    (IK    TIIK    C.RK  AT    WAR    II'OX    SlllPriXfi 

(jD'xls  lonsij^iicd  from  the  I-.ast  to  other  ports  "  some  "  profit 
must  l)e  secured — in  one  case,  for  iiistatice,  the  freif;ht  col- 
lected was  t.')(»,nnn,  and  the  owner  received  ahout  t:.',oo(i. 

( )ii  Tuesday,  last  week,  Sir  o,  in  answer  to  Sir  Walter 
Riincitnaii.  endeavored  to  expl.un  that  "  the  pojicv  of  the 
Ministry  of  ShijipinK  is  i.p  charge  the  e(iiiivalent  of  liiue 
IJook  rates  wlitre  the  henefit  of  the  low  freight  would  accrue 
to  the  consumer — that  i>.  where  the  commodity  is  one  of 
which  the  supjilies  are  controlled — and  to  chari^c  full  market 
rates  where  the  henetit  of  a  lower  rate  would  he  likelv  to 
iH>  down  to  the  product-,  merchant,  or  middlenian.  with  no 
advantage  to  the  consuiner." 

To  the  outsider  this  seems  like  the  height  of  wise  policy. 

In  addition  to  the  direct,  there  are  indirect  ways  of  Retting 
money  out  o*'  the  steamers.  Thus  '  it  is  pointed  out  that  by 
handinj,'  the  vessels  over  tn  the  Allied  (Jovernments  at  Blue  Mook 
rates  and  making  the  .\Mied  (Jovernments  assume  the  war  risk, 
the  I5ritish  (Jovernnient  makes  a  prolit. 

Ships  have  also  lieen  made  a  .source  of  profit  through  the  prices 
they  paid  for  coal. 

One  instance  of  the  extent  of  government  exploitation  of 
our  major  industry  must  suffice:  An  owner  having  carried 
a  cargo  of  coals  to  .Alexandria  for  the  Admiralty  on  Blue 
Book  terms  was  allowed  the  j)rivilege  of  conveying  another 
cargo  to  this  country  from  India  at  a  very  low  rate,  but  on 
condition  that  he  bought  <■..•(()  tons  of  bunkers  from  the  gov- 
ernment at  tti  lo.s.  a  ton.  What  was  the  result  ?  Just  this. 
that  on  the  making  up  of  accounts  instead  of  receiving  any 
freight  from  the  government  for  the  outward  voyage,  the 
owner  actually  had  to  pay  them  a  small  balance  in  respect 
of  the  coal  on  w  hich  they  had  made  over  £5  per  ton  profit." 

The  M.mntenance  of  the  Private  Fleets  of  Britis.i 
Merchaxtmex 

Altogether    the    financial    status   of    British    shipowners    has 
greatly  declined  in  the  period  of  the  fuller  nationalization.     As 

'  /•'.ii'T'/uv,  Dccemher  l,i.  1917.  p.  979. 
'  llnd..  -March  8.  1917.  p.  514. 


HRITISH    CONTROL    AND   OPERATION    OF    SIIIPIMNG  177 

an  evidence  of  this  the  earnings  of  the  International  Mercantile 
Marine  to.  operating,'  liners  declined  from  t^o.looooo  in  l!»li! 
to  a  1.. -.00.000  in  1!.17.    DnrinK  the  jK-ri-Kl  nf  partial  requisition- 
inK.  the  IJntish  press  ranj;  with  complaints  of  shipowners  and 
their  friends.  Iwcause  the  Kovernment  would  not  «rant  war  risk 
msurance  sufficient  to  replace  a  ship  Nvhen  she  vvas  destroyed 
Ihus  a  shipowner  saw  himself  in  a  position  of  having  a  ship 
today  worth  m  the  open  market  i:24(>.0(M).  and  after  she  was 
tori)edo.H.  he  found  himself  in  possession  of  a  claim  against  the 
government  for  fKiO.ooo  insurance,  which  mi^ht  Ik:  paid  some 
months  later  and  was  entirely  inadequate  to  replace  his  steamer 
at  present  prices,  although  that  sum  may  i^rhaps  build  him  Inno 
ships  three  or  four  years  after  the  war  ends. 

Mr.  W.  J.  .\„i,ie  in  seconding  a  protest  to  the  government  in 
the  Xorth  of  England  Steamship  Owners  .Association  meetinL  . 
said : 

Taking  the  actual  sums  received  in  resoect  of  l.'i  specific 
vessels  from  the  commencement  of  the  war.  plus  deprecia- 
tion, the  aggregate  amounts  were  little  more  than  one-half 
the  sum  required  to  replace  the  tonnage  on  the  basis  of  pres- 
ent shipbuilding  prices  otTered  by  neutral  owners  for  new 
tonnage. 

While  the  shipowner  had  the  chance  for  a  part  of  his  Heet  to 
be  free  and  get  th:  high  rates  of  the  market,  he  had  some  possi- 
bility of  setting  aside  profits  to  get  more  ships  even  at  war  prices, 
but  when  the  whole  of  the  British  fleet  went  under  requisition  at 
Blue  Book  rates,  the  possibility  of  repla-:ement  or  private  exten- 
sion of  shipping  l,ecame  virtually  nil.  for  the  price  and  cost  staved 
at  phenomenal  figures  and  the  ship's  earnings  were  ever  growing 
less  because  of  a  fixed  Blue  Book  rate  and  the  steadilv  increasing 
costs  of  operation.  The  sitMation  is  well  shown  bv  the  statement 
of  \\ .  H.  Raeburn  in  a  presidential  address  l«fore  the  Chamber 
of  Shipping  of  the  L'nited  kingdom  in  March.  1917: 

What  are  called  Blue  Book  rates  were  moderate  enough 
all  things  considered,  when  they  were  agreed  upon  with  the 
government  at  the  commencement  of  the  war;  but  everylwdy 
'  /  hyd's  Weekly  Review,  October  19.  1916,  p.  5. 


l""*       iNKLi  I  NiK  (n    riii:  (JBKAT  WAR  I  pnx  siiiprixr: 

kuuvys  the  cost  i.f  runninj,'  ships  has  far  nmre  tha:.  .lotililt-d 
it>f!f.  Ip  to  a  certain  time  it  is  perfectly  true  that  ^hip- 
nwiKT-  were  makiiij;  lar^e  |)r(.lits  thrimj;'h  ha\  iiiu'  a  fair 
pn.p(iriiut)  nf  their  tniitiajie  free  of  re(Hiisitioti;  hut  jjrail- 
iially  the  percentage  of  rcfpiisitioticd  ships  has  increased 
until  now  there  are  very  few  vessels,  which  arc  not  running 
It  either  Itlue  l!(Mik  rates  or  freir'  s  restricted  liv  the  >late. 
I  now  hear  that  all  liners  have  commandeered.     Tak- 

in>;  into  account  the  heavy  incr  n  the  cost  of  insurances, 

the  enormous  prices  paid  for  .pkeep  and  repairs,  and  the 
time  vessels  are  oil  hire  doin^'  necessary  repair  work,  not 
to  speak  of  our  havinj,',  ,it  our  own  e.\pen>e.  to  pro\ide  jjini 
mountings  and  |)ay  ami  feed  the  j;unner>.  the  lilue  I'.ook 
rates  leave  no  mar;;in  for  fresh  enterprise.  In  the  case  of 
steamers  which  have  heen  completed  at  war  prices,  there  is 
not  even  as  much  margin  as  will  ccncr  ordinarv  depre- 
ciation.' 

As  to  the  profit  aspect  of  Blue  Hook  rates,  a  few  months  later 
Mr.  lionar  Law,  in  introducing  the  budget  in  Parliament,  said: 

I  have  tnyself  examined  something  like  a  score  of  acci.unts 
of  typical  ships— and  that  is  a  kind  of  examination  tliat  I 
am  reallv  competent  to  make  (jn  tny  own  account— and  in 
not  one  of  those  cases  was  it  possible  for  them  under  the 
rc(|uisition  terms  to  make  anything  like  prewar  rates  of 
profit.  ;  wish  the  House  to  realize  that.  Manv  of  them 
show  a  loss,  liut  my  point  is  that  it  is  impossible  under 
the  requisition  terms  to  make  even  a  prewar  scale  of  profits.^ 

The  bankruptcy  of  3  C(jmpany  that  started  in  the  ship  business 
on  the  hin-h  prices  of  IDKi.  largely  on  borrowed  money,  is  there- 
fore a  very  natural  proceeding  '  for  the  simple  reason  that  the 
ships  bein;,'  recpiisitioned  the  company  could  not  pay  the  interest 
(.n  the  mortgage,  and  the  stock  was  valueless. 

The  war  brought  two  other  tnnibles  to  the  liritish  shipowner 
with  his  fixed  lilue  Book  income.  One  is  the  delays  due  to  the 
inadeciuacy  of  docks  for  repair  work.     This  inadequacy  arises 

'  I-airflay.  .March  8.  1917,  n.  427. 

•'  Unyds  /l',v<7v  l\'iiii"u\  June  _'.'.  1917.  p.  5. 

'  lairrlay.  September  U,  1917.  p.  493. 


RRITIitH    .  oxmoi.    AND  OPrRATlOX    nf   SHtPPIVG  170 

from  th,.  I;,r«f  iitili^atinn  of  yanN  f,,r  naval  wnrk.  the  incuascl 
repairs  ..t  merchant  >hi|.i)inK  and  the  ^h..^fa)•l  nf  laln.r.  which 
means  alt-iKethcr  that  the  ships  arc  losing  more  time  in  repair 
than  III  jH-acc  times. 

The  second  of  these  troul.lc-«  is  increased  wages,  British  lalx.r, 
alert  and  thormighly  orRanized.  has  not  failed  to  tai<c  some  a.l- 
vantaye  of  the  opportunities  otTerc«l  hy  the  war.  .\fter  recjuisi- 
tioning  had  k-come  almost  universal,  there  was  a  strike  at  Liver- 
pool. Seamen  were  offered  tl  a  month  increase,  l.ut  having 
efyecti\e  votes  the  lahor  leaders  went  off  to  London  and  through 
political  pressure  won  an  increase  of  rates  from  t«^  los.  and  tl» 
per  mnnth  to  til  and  £11  l(»s.— i:«(M».ooo  a  month  from  the 
pockets  of  British  shipowners,' 

The  tendency  to  sell  out.  and  the  anticipation  of  lower  price* 
l)efore  the  war  ends'  is  aided  by  some  sense  of  alarm  at  .Ameri- 
ca's large  shipbuilding  program.  The  tendencv  for  the  tramp 
owner  to  sell  is  further  promoted  hy  the  desire  of  British  lines 
to  buy  and  thus  maintain  their  services  and  clientele.  The  only 
way  they  can  do  this  is  to  buy  or  charter  tramps  for  the  w.;rk. 
The  smaller  number  of  ships  now  afloat  reduces  the  ne«?d  for 
manauers  and  owners.  As  a  result  of  all  these  influences  British 
shipowners  are  constantly  leaving  the  trade. ' 

All  this  restriction,  reduction  and  inability  to  make  money  or 
increase  his  tonnage  is  very  alarming  to  the  British  shipowner 
who  thinks  of  ships  only  as  private  property  built  bv  private 
enterprise.     He  sees  the  Scandinavians  and  Japanese.'  and    up 
to  a  recent  date,  the  Americans,  piling  up  huge  reserves  of  war 
prohts  which  he  fears  will  lie  used  against  him  in  postwar  pcrio<l 
when  he  must  right  to  win  back  the  lost  trade,  if  he  wins  it  back 
And  he  naturally  views  with  alarm  such  a  proceeding  as  that  of 
the  making  of  many  contracts  late  in  l!tl7  between  British  ship- 
builders and  Norwegian  shipowners  for  vessels  at  £:>-,  per  ton 
for  delivery  after  the  war.  subject  to  the  permission  of  the  British 
Government,  with  the   further  provision  that  any  increase  in 
''n\?I-^\?'^u"i^^'  ^V^i.^,:^^^-  ""-^  "^obfr  U,  1917,  p.  602. 


l-ft       iNnriNt  i:  (IF   riiK  c;iik\t  war  i  ii.n  ^nrriNr, 

material  ..r  waRcs  ..vcr  cxi*tinK  com*  Hhall  k-  a.l.|f.l  i..  the  i)ricc 
<'<  thr  rnntract.      Ihr  price  icprcwniH  at  lea^  f.mr  litiic*  |.r  :>var 
o.^ts.  and  v.Ii-ly  l*faii»c  .,f  pivfrnmcnt  re^trictioiiv   it   i.  ..m- 
which  liritirth  •.hii>..v>?ier'.  arc  not   m  a  |>..*itii.n  u>  |«\       IhcH.- 
iwrticular  cntract*  wrrc  \\w  caiinc  of  the   \..rth  <>i  IjiKlaml 
Shipnwnir,    \ssnciatinn  pctitinmnK  the  Shipping  (.uMtn.ller  t.> 
make  representations  to  the  pivcriiment  tliat  it  shonl.l  revi^v  it* 
jxflicy  ami  "take  Mich  steps  as  nvouI.I  cnal.ie  the  Mritish  ..uncrs 
to  rehal.ilitate  the  I'.riti.h  mercantile  mariik- ."  '    jn  the  meantime 
tile  Mritish  (iovernmeni  >hu\vs  no  sij;i,,  „i  letfitiK  the  I'.ritish  ship- 
owner rehabilitate  the  mercantile  marine,      lie  can  only  .|o  that 
out  of  war  freight  rates,  ami  the  government  is  prohihitinu  war 
freight  rates.     lUit   it  is  nevertl'  It-ss  l.uil.liiin  ships  itself  with 
might  anil  main,  ami  the  (iiie^tion  of  ultimate  o«i  -  iship  of  these 
lleets  is  prohlematical.  aithouKh  it  is  generallv  expiated  that  they 
will  lie  sold  after  the  war.     It  i,.  however,  scarcely  problematical 
to  predict  that  the  Norweni.n,  uijl  wait  a  lon«  while  for  those 
high  priced  ships  to  be  built  for  them  in  British  shipvards.  for 
the  yard-  like  the  ships  are  now  and  pro|,ably.   f,,r  a  time  at 
least  after  the  war.  will  be  under  re<|uisition  bv  the  llritish  (iov- 
ernment,  which  seems  to  be  maintainiuK  a  consistent  policy  of 
doing  eyerything  in  is     [M.wer  to  stop  umliie  profiteering  in 'ship 
operation  and  shipbuilding.     It  is  wisely  preventing  the  paying 
nt  war  rates  and  it  is  therefore  preventing  their  capitalisation. 
'^  et  It  IS  striving  to  keep  British  ships  u|m)ii  the  seas.     It  is  much 
cmerned  aUnit  the  welfare  and  safety  of  the  nation  and  very 
little  concerned  ab<nit  the  profits  oi  any  group.     This  i,  as  U 
should  be.     The  s.;!dier  is  making  no  profits.     He  serves  and  a 
truly  loyal  nation  will  serve  on  the  same  basis.     The  fpiestioii  .,f 
the  restoration  of  business  to  the  profit  basis  after  the  war  (,r 
Icayin^'  ,t  on  the  service  basis,  brings  us  face  to  face  with  one 
ot  the  wars  greatest  and  nuist  iiitenstiiig  results.     ,\t  present 
the  government  is  utilizing  something  it  did  not  make,  namely  the 
commercial  organization  of  pv.ice.     This  peace  organization  has 
made  or  k-en  compelled  to  make  a  truce  on  profits— for  a  time. 

'  U.'ydj  ll\'ckly  A'.-;/,-ti',  Octolxr   14,    l'>17,  p.  S. 


WHITISH    CONTB.)!.    A.VI>  OPtUxno.V    Of   MllimN.i  |«| 

i.  ha,  l..cn  .Irafte.!.  The  Rovcrmn. ,.,  cu„l.|  „„  „,..r.  crea.r  :n«w 
a  .hp  nu,.'a«rmrnt  than  ,t  c.  nl,| .  r.atr  anew  a  iKci.  The  KeiiinE 
••  .he  .h,,,,.n«  ,.„M„e,,  ...T  ,he  war  .«,i.  n,av  ..  aim...  a.  Z^. 
HrxmK  a.  ha,  l..n  ,he  ,.r..e.  .f  «„„..«■ ,  .,  ..,  ,h,  ^a. 

Tin:  l.„A.v  .>K  BmT.sH  Siiiw  to  Fhanik  a.vo  It«.v 
The  British  ,hip.nvner  ha,  evcrci,e.l  hi,  national  prerogative 
..f  KTuinhmK  lu„  he  ha,  certainly  ha.l  a  fair  a,n..„nt   .f  ha,i    .! 
an  in.hvi.lual  f.,r  ,hi,  complain,,  aiul  ,,erhap,  nothniR  ha,  li  lc, 
more  to  esacer  «,e  him  than  the  ,iKht  of  the  ,ervice  ,*r  tat    a 
mlere.1  her  a  lie,,     a  million  tonn  of  Hritinh  ,hippm«   re.,n, " 
loned  at  Blue  B.K.k  rate,,  wa,  early  han.ie.l  over  t.^'prance  '   Bv 
the  .10th  of  July.  nilT.  M.  ,|e  Monzie.  I'mler-Secretary  of  S,.  e 

So  .M.r.  '7^:^ ''-' '''  --"'  •'^'  ^-^'^ 

tion  ,  f  ,1.  T      u  *  '^'""K  ""•  •'•  ^••"'"■•l^'ral.le  por- 

un  of  the  I-rench  commercial  fleet  wa,.  until  micNummer  of 

he  ,ea  ami  earn  en..rmo„,  profit,  f.,r  it,  owner,.     Xaturally 
.he  Brit.,h  owner  thought  that  Franc.  shouUI  have  recui^iUone.! 
.jn.l  a.,jtrolIe.l  her  own   ,hippinK  l.efore  taking  a.lv  ntag 
hnglami,  shipping.^     The  oplanatio.i  of  this  Situation  ifv 
de^^Monzie  m  the  Prench  Chaml.r  is  naive  in  the  extreme,  f.r  he 

anJ*!.'"  T'r'""u"^  ""'  ^'"  •"""•■'K'  ^^as  emplove.1  usefully 
ami    se,l  for  the  national  gcxxl  by  iu  manager's.  <•  ^ha  c 

He'^  c  ^^n'  '"/?'  '"^"='«'^'"^"t  «^  tlH-  ^hips  c.;nfid;d  to  them 
He  coul.l  not  !«.  e.xpecte.l  without  anv  organization  with" 
..ut  c.K.i>erat,on.  "without  a  staff,  wit'hout  comrnercia    ex 

•ul     1-    r  •  ^'P^'^'^">-  ^«^"'«  that,  hv  the  de-Vee  of 

"l.>    1 . .  the  government  ha,  the  n^ht  to  exercise  the  ner 

ina^nt  control  u„  ever,  voyage  and'  the  p^w^"  to  ;eLrc  a 

'  /^»ir/./,iv.  September  .?.  1917,  p.  462. 
//"(/.   September  9.  1917 
/bid..  Octcbcr  11,  1917.  p.  595 


•  *-         INH.I  I  M'r  in 


ru»  i;i«r\r  w  ah  in  in  «iiift'iM, 


I-.  uhKl,  ,l,v  „..,„ral  llrit,,!,  rq.lv  «.u  ihal  ,f  ,|,.-  Ircuh  (...v 
.rnnK-n,  «.i,  ,,,,.,1,1^  i..  ,„.,„aKc  ».i.-...nh»  ,.«,,  ..(  ,|«j,  .,„„  ,^ 
p...;;.  niMi  .-u,,:.!  ,|,c>  .|.,  „,.h  .'..mnmmk.  ,„„.  .„  t,,„„,,  ,,„,,„i,7r 
A  cr„„  •cc„„  In  have  I,,,,,  |.r.„„.l„  al.,m  l.j  „,..  anu/ui  ami 
alm-...,,„K-l.cval.l.c,,i«Hlr..ra  I  rcuh  ,hi,.  carry  in,  ,..  ,  |  rc.uh 
jMrt  :,  ,»|  carK.,  uf  rl,..,|.,.|n„lr,,„,.  ,..  „|„cl.  M  .lc  .\|o,»,e  in 
hi,  UmmUr  rr|H,rt.  j«|y  .1...  |,.|:,  ,,,3,1^  ,^,|,  ,„„f^.„j..„ 

l-r  example.  ..ne  .la>.  in  .„»■  .,{  ihr  imi».,ri..nt  Ircncli 

«w  arr.vm«  a  M.r,,r.Mn«  ,|„,,  «l,uh  carr.d  a  h,ll  can;..  ..f 
rh...|...U.n.|r..,„  a.  a  tunc  u1k-„  MccI  ua,  s.,  ncccn^arv.  \n,| 
.  uc.h.!  .,..,  kn,.«  ,„•  ,|H.  ,act.  .he  KnKh.h  A.lm.ral.v  .h.l. 
a... I  i.n.tes.cl  «.,h  etierKy  that  nieanirc*  ha.l  nut  hcen  taken 
t..  prevent  *uch  alni,e.' 

A*  a  matter  n(  fact    this  freedom  of  certain  French  M.ip.  to 
c..n.,nt.e  ...take  the  toll  of  free  rate*  cont.nue.l  fur  some  n.onth,. 
an.    prcva.1,.1  for  a  part  of  .'.e  Italian  .hipping  even  .town  ,., 
> '|H,  at  (he  same  ..me  .ha.  Kn^Iaiul  uas  Kallan.lv  placinir  her 
Hh.ps  a.  the  .li.|H.Hal  of  hah  at  a  low  rate, 

fn  the  .prinjr  of   lUl.i/  July  Mmt  a  special  commisMon  to 
Ilr.ta.n.   winch  resul.cl  in  the  Uriti^h  (iover„„,ent  placing  7.» 
s  earners,  o,  .-,000  ,ons  .Icul-weiRht  each.  a.  the  disposal  of  the 
Italian  « ...ycr.m.cnt  .u  hrin«  :i.-.o..xM)  ,on»  of  grain  .0  l.alv  a.  the 
same  .rcKJu  IuikLuuI  was  pa>  inp  to  re.|iiisi.ione<l  steamers     She 
also  gave  su...c.ent  ...nnaj-c  to  carry  ......oih)  tons  m-nuhlv  of  coal 

fr.,n.  .  ani,.  for  the  I.aHan  sta.c  railwayn  for  the  .luration  of 
the  war,  and  eighteen  m-.nths  later  some  Italian  ships  were  s.iH 
.a.tcn.ng  the.r  owners"  pockets  with  the  •  utrageoiis  earning*  of 
.he  full  market  rate. 


iNTERALLIfcD  ClIAKTERING 

After  the   i:„glish.   I-Vench  ami   Italian  flovernments  ha.l  to 
supplement  the.r  own  ,upplie.  -f  shipping  by  chartering  neutral 


BIITIlll   lONTBOL  AMI*  OWBaTIOX   or  JllMprlKU  |il.1 

•hifrmiK.  ii  Unittir  carlv  rxi.lrnt  that  the  c.«H)clii.-n  ..(  one  with 
Hr  other  icn.le.1  l,.  forcr  up  rate,  ni-re  tlwn  «.,ul,|  U  ,he  ca^- 
>f  they  ha.|  a  ^nRle  charHrit.K-  l^.ar.|.  uhuh  w.,*  acc.,r.|ini.-lv 
create.!  „n.ler  the  title  u(  the  lntcral!ir.|  t  hartering  r.«nmu,„ 
«ti,|  «h,fh  \us  »*e„  at  w.  for  ri.any  .....nthv  A  Mm.iar  att,tnr,» 
t..cnmhut  interallie,!  ,hip  ,M,rch..^,  thnuiRh  a  cmtiiMn  l.>ar. 

't  V,  .iicce„ftil.  acn.r.lii,ii  t..  the  a<lmiMi.>n  ..r  ati  tinde 
tary  in  the  Uriti^h  Parliament. 

On  i:nKli,h  initiativ,-  the  All.e,  agrrrd  ,hat.  a.  «e  ha<l  a 
c.  ",..nn  ,H.hcy  f„r  charter.,,^,  i,  wa,  „c.c..arv  to  have  a 
cm.m..n  ,K,l.cy  for  purciiaMMy,  The  ,hi|H  oi  all  the  worl-l 
were  to  !«•  plawl  on  the  tal-lc.  an.l  to  Ik-  .livi,l,.,|  i„  rricn.lK 

U^uZTr      '    T    f^T'    "'^"    '•^'^■''    ^"""TV-France. 

ltal>  an.l  l.nKlan.1  -which  wan  reprevnte.1  on  the  mirchan- 
mu  comnmtee  co„M  onlv  l,m  a  -hip  after  it  has  )>^„ 
authorized  to  <!.,  *o  |,y  ,he  intcnuilumal  committee  The 
result  W.W  that  when  a  maniifactnr.r  or  a  shifx.wner  .lesircl 
to  purchase  a  Norwegian  or  a  (.rc.k  ship,  he  sent  in  ,.  re- 
quest l,,  the  Munstry.  .leclarinR  that  he  ha.l  an  optio,,.  .,r 
that  he  ts  ne^.-tialiiiK  for  the  purchase  .,f  the  vessel  The 
Kovernment    talks   „ser   the   pro,M     '\,>n,  an.|   transmit,    it 

hrouKh  Its  reprenntat.ves  ..»  th,  crali.e.l  committee  i>. 
Lomlon.  The  representative.  ..f  ,  three  countries  then 
l.scuss  whether  the  ship  sha  !  !.•  place,l  among  those  allotted 
to  France,  l-.n^latul  or  Italv 

.\l.  (.ratien  (j-mlace:  M-    ,  vhilc  a  neutral  Iniy.s  the  ship. 

system  has  t)ecii  ry  disapj)..intini;.  .  .  .  In  truth  I  re- 
l)cat  the  system  of  the  purchasii.i^  committee  has  licen  the 
-source  of  numerous  (lisagreeil)le  experiences.' 

As  the  result  of  his  ex,)erience  w  ith  the  law  of  supplv  an.l  demand 
when  supply  had  ceascti  to  Ik:  able  to  meet  .lemand.  the  i,n<!er- 
sccretary  made  the  following  interesting  lament : 

If  it  is  not  tor  want  of  money,  why  have  not  purchases 
I'cen  more  numerous'     In  truth,  it  must  he  state<l.  without 
any  desire  to  extract  therefrom  any  exposition  of  principle. 
'  Itiirfilay.  ijcptcmbcr  IJ.  1917,  ,,   4«^ 


1S4  INTI.I'KNi.  i:    fit-    TltK    r.RI-AT    WAK    IPON    Sll  I  I'lMNf. 

free  cnnii)cfiti(in  is  an  cNtTlltiit  system  in  time  of  pence,  but 
impracticaiile  in  time  of  war.  whatever  attraction  there  may 
k'  for  certain  state  ownership  formulas,  it  is  not  possii)le  ti) 
allow  complete  freedom  in  this  matter.  Complete  freeduni 
is  bad  in  other  thinjjs.  but  it  i>  especially  bad  in  the  question 
of  chartering  and  purchasing  slii|)s. 

Internatio.nal  Co.vrKoi.  of  Ships 

The  continued  delays  of  ships  in  port,  such  as  a  vessel  requir- 
inj;  a  month  to  unload  at  a  French  port  in  the  sjiring  t>i  I'.ilT." 
showed  the  .Allies  the  necessity  uf  absolute  planning  of  all  ship 
work  by  some  comprehensive  body,  and  therefore  of  absolute 
consolidation  of  its  control,  h  was  but  natural  tl.at  within  a 
year  after  the  establishment  of  unified  control  of  British  shipping 
under  the  Ship[)ing  Controller,  there  should  follow  the  natural 
next  step:  namely,  an  international  organization  to  coordinnte 
the  transi)ort  facilities  of  all  the  Allies,  such  as  was  planned  by 
the  Interallied  Conference  at  Paris.  December.  li»17.  A  com- 
mittee was  formed  with  .\merican  representatives,  and  a  British 
meml)er  resident  in  New  York.  ( See  Chapter  VII.)  This  body 
IS  able  to  order  any  .\Ilied  steamer  by  wireless  to  any  port  which 
their  knowledge  of  conditions  makes  it  most  desirable  that  it 
should  reach,  even  to  the  extent  of  changing  the  routing  of  the 
vessel  while  at  sea. 

Similar  attempts  at  simplification  of  the  coal  transport  trade 
(see  Chapter  IV')  and  the  wool  transport'  were  doubtless  of 
value  in  helping  the  railroads  keep  tlie  ports  clear. 

The  i)roblem  of  port  congestion  has  largely  disappeared  but  in 
this  connecti(jn  the  increasing  ship  famine  and  freight  famine 
.-hould  not  be  overlooked. 

It  is  to  be  hoped  that  this  national  and  international  unification 
of  control  may  bring  alx.ut  that  desired  condition  where  vessels 
load  pn)mptly.  sail  promptly  and  then  immediately  proceed  on 
their  next  assignment. 

'  l-airflay,  Mardi  IS.  1917. 

^\  committee  croatfd  by  order  of  tile  Armv  Council  was  established  with 
hea.lcjuarters  at  BradfonI  to  aiiprove  of  wool  shipments  so  they  would  pro- 
VKle  better  shipping  and  most  direct  routes. 


CHAPTER  VII 

Control  and  Operation  of  Shipping  by  the  United  States 
Government,  19 14- 1 918 

SiMILAIUTY    OF    FnGLISH    AND    AmKRICAN     EXPERIENCE 

Like  causes  tend  fo  pnidiicc  like  results.  It  is  tor  this  natural 
reas..!i  tiiat  we  in  the  United  States  liave  duplicated  IJijiland'.s 
experiences  with  ship  operation  in  all  important  respects,  but 
with  great  difference  in  detail  resulting  from  the  different  wa\s 
in  which  the  prohleni  unfolded  itself  in  the  two  countries.  While 
England  was  having  two  and  a  half  years  of  war  with  ever  in- 
creasing pressure,  we  were  having  a  period  of  profitable  neutral- 
ity, during  which  the  American  nation — farmer,  manufacturer, 
exporter,  financier,  and  shipowner  alike— fattened  his  purse  at 
the  expense  of  England.  France,  Russia  and  Italy.  Then  we 
entered  the  war.  and  within  less  than  a  year  a  swift  series  of 
increases  in  governmental  authority  left  American  shipping 
bound,  controlled,  to  all  intents  and  purposes  <lrafted.  nn  arm  of 
the  governinent.  as  was  the  case  with  British  shipping. 

Along  with  this  increase  in  authority  went  the  rapid  realiza- 
tion of  inefficiency  of  operation,  accompanied  by  the  persistent, 
almost  pathetic,  pleadings  of  Europe  for  help,  for  ships,  ships,' 
more  ships.  These  calls,  driven  home  by  the  spectacle  of  block- 
ades and  partial  paralysis  of  our  own  industry  because  of  trans- 
port congestion,  led  to  rapid  developments  in  organization  and 
more  organization  in  the  struggle  to  add  efficiency  unto  author- 
ity. We  probably  had  no  reason  to  expect  it  to  be  otherwise. 
but  it  is  none  the  less  an  unpleasant  reflection  that  during  this 
three  and  one-half  years  the  American  democracy  showed  in  its 
development  of  shipping  policy  no  sign  of  having  learned  by 
observation  when  the  object  lesson  was  so  near  and  «>  well 
known  as  the  English  experience.     Certain  conditions  produced 

1U5 


Istl 


iNKi.iTvrr.  OF  TiiK  r.RFiAT  WAR   imx  SIIIIT!\r; 


certain  roiilt-  in  I^.n^land.  and  all  wi'  k-arncd  I'mm  it  was  to 
rfcnjjiiizi'  the  resnltin;,'  symptoms  somewhat  mure  i)nmiptly 
when  we  in  our  turn  had  the  causative  trouble  and  had  the  tacts 
repeatedly  pointed  out  from  ICurope.  The  slowness  of  our  wak- 
ni,','  u[)  serve.-  as  an  added  reason  why  the  educated  imperialism 
of  (iermany  must  lie  suppressed,  fur  it  is  plain  that  society  based 
upon  individualistic  profiteering  industry  has  no  chance  to  sur- 
vive in  the  presence  of  scientific  imperialism  organized  for  con- 
quest. 


I'mtfd  State.s  a  Bystander  i.v  the  SiiippiNci  World 
INTIL  lit  17 

During  the  first  two  and  a  half  years  of  the  war  the  United 
States  (Jovernment.  as  for  decades  past,  played  the  part  of  the 
bystander  in  the  world  of  shipping,     it  is  true  that  the  Ameri- 
can shipyards,  individualistic  enterprises  all.  were  busy  building 
bhips  partly  for  American,  ])ut  chiefly  for  foreign  owners,  but 
the  attitude  of  the  nation  and  the  actual  achievement  of  the  gov- 
ernment was,  as  aforesaid,  chiefly  that  of  a  bystander.    We  had 
been  altle  to  do  this  in  times  past  in  peace,  for  the  simple  reason 
that  in  the  conduct  of  our  economic  life  we  did  not  need  to  build, 
own,  or  operate  ships.     Have  we  not,  every  month  of  our  lives, 
heard  the  true  boast  about  tlie  -^reat  variety  and  completeness  of 
American  resources  and  inihistries?    We  all  knew  we  could  live 
comiurtably  on  the  products  of  our  complete  round  of  natural 
res(jurces.    We  did  not  need  foreign  traile !    (  At  least  we  did  not 
need  u  nuich. )     Therefore,  we  did  not  need  to  provide  for  it! 
The  chief  trend  of  our  trade  legislation  has  been  to  build  up 
tariffs  lu  pnjhibit  imports  which  flow  to  us  because  the  world 
had   t"   have   the    rich   ])roducts   of   our   monopoly   supplies   of 
cott.in.  nil.  co])per,  lumber,  grain,  meats,  tobacco  and  patented 
machinerx-,  which  have  made  uj)  the  great  bulk  of  our  exports, 
liurupean   nations   built   their   ships  and   came   to  our   shores 
for  these  goods,  and  when  war  came  our  monopoly  position 
was  >trengthened  because  of  our  great  ability  to  make  munitions. 


AMERICAN    CONTROL    AM)   OPERATION    OF    SIIIPPINO       IS? 

The  Allied  shij)-  cnme  for  munitions  also,  so  that  still  we 
(lid  not  serio-.sly  need  ships,  and  never  having  had  anv.  wc 
knew,  nationally  speaking,  little  about  them.  This  is  well 
proved  hy  exa-'iination  of  the  part  the  shipping  question  played 
in  the  life  of  Washington  during  the  first  two  years  of  the 
war,  when  Congress  spent  much  time  exposing  our  general 
national  ignorance  of  shipi)ing  questions. 

IFe  Admit  Forciijn  Ships  to  Rajislry 

As  a  bystander,  we  hastened  to  gather  up  the  wreckage  of  the 
battle.  With  surprising  alacrity  Congress  threw  open  the  door 
to  foreign  shipping  by  passing  a  new  ship  registration  act  within 
less  than  three  weeks  after  the  war  started  (August  IS,  1914). 
For  the  first  time  in  decades  the  foreign  built  ship  was  permitted 
to  register  under  the  American  flag.  In  the  next  ten  and  a  half 
months,  namely,  to  July  1,  1015,  we  received  1 1>  vessels  '  of 
r,L';5..'J(;i  gross  tons,  but  foreign  prohibitions  of  transfer  of  ves- 
sels to  other  nationalities  reduced  this  amount  to  a  small  figure 
the  next  year.  It  should  be  stated,  however,  that  about  nine- 
tenths  of  the  vessels  that  came  to  us  represented  no  change  of 
investment,  merely  the  transfer  of  American  owned  vessels - 
from  the  foreign  flags  under  which  they  had  been  running  more 
economically  to  the  American  flag  under  which  they  were  com- 
pelled to  run  more  expensively,  but,  owing  to  the  troubles  of  the 
war,  with  greater  safety  and  profit. 


'  Of  these,  96  of  332.258  gross  tons,  were  formerly  under  the  Briti^li  tlaa 

30        147,742      •         •;         •■  ••  ■•        "     Herman 

,'        "    Cuban 
!.  '  Kelgia'.i 

"  '        "     Mexican 

"  "        ■'     Rumanian 

L'ruguayan     " 
"     Chilean 

New  tiitcniatioiwl  j'.ar  Book.  1915.  p   589  •  orwegian 

I-  "J'?'-"  .Standard  Oil  Co.  of  New  Jersey  owned  25  of  130,322  gross  tons;  the 
Lnited  1-ruit  Company.  24  ■)f  113,243  gross  tons:  and  the  United  Sates 
Steel  Products  (o  10  of  48,271  gross  tons:  and  44  individuals  or  corporations 
owned  each  a  single  ship.    New  Intcrnatintial  Year  Ponk.  1915,  p.  58'). 


5   ■ 

17.401 

6    • 

10,549 

5   • 

5.452 

1    • 

5.275 

I    • 

1.352 

1    • 

1.3S1 

2   • 

1.349 

188 


INFI.tKMF.    OK    Tin:    (;Hr.  \T    WAh    I    I'ON    Sllll'I'IVG 


Tlif  l.a  rollctic  Si-amcn's  lUll 

Despite  tlif  war,  the  Aniericaii  (.ciiKress  passed  the  La  I-"..lleftc 
Seaim-n'>  Act,  March  4,  l!ii:.,  which  went  int..  effect  fcr  Ameri- 
can vessels  \nvetnl)er  I  ni  iliat  vear,  and  for  foreign  vessels  in 
American  trade,  March  \,  llU.i.     This  was  Kfiierally  considered 
to  he  m  favor  of  the  Seamen's  L'nion  rather  than  of  shippin^j  or 
export  trade.     It  made  desertion  a  less  scriuns  offense,  it  pro- 
vid.-d  that  the  crew  should  he  paid  half  their  wages  at  every 
port,  thus  making  desertion  much  easier.     American  shipowners 
flatly  declared  they  c.nild  not  rnn  vessels  under  this  act  and 
several  .American  lines  sold  their  ships  to  foreign  owners.     The 
most  ojnspicuous  of  these  was  the  Pacific  Mail  C(.mi)any,  which 
since  I^4^  had  heen  an  important  factor  of  transpacific  trade, 
and  which  -...w  sold  t(j  Japan  the  fastest  steamers  crossing  the 
Pacific— the    1^-knot.     ll,(M)(»-ton    boats    Siberia    and    Korea. 
Altogether  the  los'   s  hy  sale  .)f  American  vessels  for  lit  15- Id 
(10:.'.47lt  tons)   were  greater  than  our  gains  hv  transfer  from 
other  flags  (s.'j,4,so). 


President  Wilson's  Shipping  Bills,  l!)i:)-l!»17 

During  the  winters  of  l!t]  I-l.",  and  l!»l.-.-l(;.  the  general  ques- 
tion of  the  world's  ship  supply  was  f..rcing  itself  upon  the  atten- 
tion of  every  nation  with  any  overseas  trade.  I3v  January,  1  !•]:.. 
rates  had  reached  the  highest  j.oint  ever  known.'  The  disappear- 
ance of  the  (Jerman  liners  from  the  sea  and  the  stcadv  requisi- 
tioning of  British  vessels  was  causing  us  to  appreciate  as  never 
helore  the  fact  t'lat  we  had  hut  few  ships.  The  Wilson  admin- 
istration brought  forward  a  Ijill  aimins:  to  relieve  the  situation 
hy  pn.viding  $-.-,.O0(i.(M)()  to  huikl  or  j.urchase  ships  to  he  owned 
hy  the  L'nited  States  (iovernment.  This  precipitated  a  long  and 
acrimnnious  debate  in  Congress  and  in  the  press.  It  had  as  its 
intellectual  background  the  general  impression  that  America  had 
lew  ships,  that  the  carrying  of  her  trade  was  in  the  hands  of 
the  foreigners,  that  the  foreigners  had  formed  themselves  into 


AMKRICAX    fOXTKOL   AND   Ol'ERATION    OF   SHIPI'INC       lS!> 


trusts  who  (lid  as  they  pleased  with  American  trade,  and  that  we 
were  Iwiiig  fr"iils't'<l  '*>'  these  forcijjn  trust-;.  This  feeling  was  some- 
what increased  In  the  knciwled^c  tha  iuij;land  was  getting  her 
cwn  servic  from  he/  ships  at  the  1(jw  Hliie  Book  r.tes  while 
unre(|uisitioned  I'.nglish  ships  were  charging  us  the  highest  rates 
eve.  known.  Our  sense  of  independence  was  offended  Mean- 
while there  stood  the  Interstate  Commerce  Commiss.  ii  as  a 
model  in  most  .American  minds  of  the  way  in  which  a  transport 
monopoly  n  ijrht  be  cur!>ed.  Why  not  curb  the  ihipji'^g  mo- 
nopoly as  wt  had  curbed  the  railroad  nKjn  jpoly,  b,  act  (jf  ('(jn- 
gress  ?  The  necessity  of  doing  something  was  generally  admitted, 
but  the  Democratic  bill  pnjviding  for  a  Shipping  Board  and  a 
)i!L'.'>,000,000  fund  for  ship  purchase  and  possibly  building  arid 
certainly  government  ownership  was  opposed  by  nearly  all  of 
us,  and  it  was  defeated  despite  the  pres.sure  of  a  strong  Avlminis- 
tration  mtrenched  by  a  big  con};ressioiial  majority  baci.eil  up  by 
str.mg  ])arty  discipline.  The  Republicans  called  it  a  plain  sub- 
terfuge that  the  Democrats,  having  put  themselves  on  recorc'  as 
oppo.sed  to  subsidy,  and  realizing  that  they  were  wrong  and  that 
we  had  to  have  something  of  the  sort,  were  doing  ,  orse.  to  save 
their  faces,  by  making  it  government  ownership.  Gt.vernment 
ownership  Iwyond  a  doubt  is,  or  in  1!M.")  certainly  i'as,  .me  of  the 
greatest  ogres  that  could  be  called  to  the  attention  of  the  business 
interests  of  .America.  We  distrusted  it — we  distrusted  its  wis- 
dom.* we  distrusted  its  efficiency,  we  distrusted  its  disinterested- 

'  "  It  seems  to  us  tlKit  the  tost  sur"'-ficial  study  of  tlie  actual  situation 
with  reward  to  ocean  tonnage,  [ireseut  aiid  prospective,  must  make  it  clear 
to  ;iny  thinking  person  that  the  Administration's  shippiiiK  measure,  even  if 
promptly  iiiacteil  by  law  of  Connres-.  couhl  not  be  c. lunted  upon  to  afford  the 
country's  CDmmer:e  any  appreciable  relief  with  respect  either  to  availa' ' 
oce.nn  carriirs.  or  to  ocean  freight  rates  during  the  period  of  real  stress.   . 

.fust  as  today  nothing  i^  so  profitable  as  a  ship,  so  within  a  short  t. 
after  the  coming  of  peace,  nothing  will  he  so  unprofitable  as  a  ship."  lidi 
rial  i-.  The  l-.coitomic  llorlii.  January  29,  1916,  p.  1J8. 

Similar  opinion  froin  high  sources  freely  crossed  the  .Xtlantic :  witness 
editorial  comment  f-om  the  great  and  cunservative.  but  individualistic.  Llovil's 
ll'rrkly.  October  22.  1915: 

"  In  other  w(  rds.  the  United  States  is  going  to  set  up  a  system  whereby 
certain  people  must  be  invited  to  speculate  in  shipping  with  government 
funds. 

The  United  States  tiovernment,  it  is  stated  by  Mr.  >';.\doo.  'will  control 
rnu»cs  and  rates.'  1'.  may  attempt  it,  but  how  will  it  stand  up  against  the 
C(    ipitition   uf  the  independent   shipowner,  whetl^er   .American  or   foreign? 


1!»0 


(XKMKNTK    OF    THE    OREAT    WAR    troN    SIIIPPINT. 


nesv  \\\-  le.ircl  it  p.s  a  tool  for  jH.litical  favoritiM.i  and  it  was 
oppose.1  anyway  t.,  the  essential  Renins  ot  onr  individualistic 
democracy.  American  Ini^iness  was  opp„sed  to  it  tlirouj;h  and 
thron},'li.  |-,,r  cNanipIe.  the  L'nited  States  Chamixrr  of  Commerce, 
a  very  representative  Inxiy  with  uidely  scattered  memlwrship, 
took  a  (luestionnaire  vote  that  showed  the  {jreat  opposition. 

I 'n. position  I.  Do  ynn  favor  the  government  nndcrtakinp 
the  purchase,  construction,  or  charter  of  vessels  for  mer- 
cantile purjioses.  toRCtlier  with  the  operation  of  such  ves- 
sels.-   In  favor,  Mi;  opposed.  O'J.s. 

Proposition  II.  Do  you  favor  ownership  of  mercliant  ves- 
.»els  hy  the  government,  hut  with  operation  hv  private 
parties  under  leases?     In  favor,  .14:  opposed,  711. 

Proposition  III.  Do  you  favor  subsidies  from  the  Rovern- 
ment  sulirtcient  to  ofTset  the  difference  in  cost  between 
operation  of  vessels  under  the  American  flag  and  opera- 
tion in  the  same  deep  sea  trades  under  foreign  Hacs' 
In  tavor,  r>."i8 ;  opposed,  iM'.. 

Proposition  IV'.  Do  you  favor  subventions  from  the  gov- 
ernment to  establish  regular  mail  and  freight  lines  under 
the  .American  Hag  to  countries  in  XN-hich  the  commercial 
interests  of  the  United  States  are  important,  and  to 
American  dependencies?    In  favor,  71  s;  opposed,  4S. 

The  j)ubliv  discussion  of  the  bill  generally  centered  around 
the  idea  of  government  purcliasr  of  ships,  but  the  sum  provided 
would  not  have  gone  far  and  the  prices  would  have  been  en- 
hanced b_\  the  appearance  of  this  strong  purchaser  in  the  ship 
market.  .\  proposition  of  Mr.  Mc.Adoo,  Secretary  of  the  Treas- 
ury, that  the  government  build  '.oo.ooo  tons  of  shipping,  received 

Tlu.  private  merchant  ship  will,  of  course.  Itt  the  state  merchant  ship  have 
any  unpnjl.table  trade  that   tsKcmig,  but  „c,  more.     It   will  be  interesting  tu 
ste  1I..W  this  curious  plan  of  hitchmg  a  merchant  marine  on  to  the  -American 
-Navy  works  out  in  practice,  if  it  ever  gets  the  chance" 
Marine  Kciic-^:  .\ugust,  1915,  p.  281. 


AMKHIt.W    COXTROI.    .WO   OPERATION    OF    .SillPPINc:       191 


scant  atteniinii,  despite  its  wisdom  and  direct  Iwaring  on  the  real 
need,  whivtj  was  to  create  ships. 


The  hill 


was  lost.     Ue  were  in  a  position  that  only  govern- 
ment action  conid  help,  and  we  overwlRlmin^iy  refused  to  ^ive 
povcrninent  the  |)ower.     lint  meanwhile  ships  continued  to  sink. 
The  liritish  continued  to  call  their  vessels  home,  even  American 
owned  ves>el>  sailing  from  .\ew  York  to  So  ith  .\imrica.     The 
shif)  famine  increased,  and  rates  rose  to  unimagined  heiphts.     In 
his  Decemlier,   111  I.".,  messape,   President  Wil.son  apain  recom- 
mended fjovernment  owned  vessels  as  a  means  of  "  restoring 
our  commercial  inde[)(ndence  on  the  sea.s."    A  couple  of  mont! 
later  the  .Administration  presented  a  liill  much  like  its  predeces- 
sor, except   that  it  provided  $.'>(».(MiO.OOo  instead  of  $l'.'..000,- 
000.  to  Iniild  or  purchase  ships  and  combined  with  it  the  Inter- 
state Commetce  Commission  idea  of  control.     The  bill  carried 
specific  and  drastic  provisions  for  the  control  of  rites  and  traffic, 
.such  as  the  elimination  of  rebates,  ami  fighting  ships,  the  tiling 
of  all  rates  and  agreements,  and  governmental  power  to  can- 
cel the  same;  power  to  eniorce  maximum  rates,  thus  preventing 
some  of  th"  extremes  of  compttition;  and  junver  to  prevent  dis- 
crimination between  persons  and  places.     On  its  other  side  it 
was  to  issue  bonds  necessary  for  the  $").).()0().000  with  which 
to  purchase  or  build  cargo  ships  and  set  tnem  to  work  carrying 
American  i  lerchandise  across  the  seas.    If  private  owners  would 
not  come  forward  to  charter  these  vessels,  the  "^hipping  Board 
was.  as  a  last  resort,  to  create  a  corporation  to  do  the  business 
itself,  keeping  control  of  at  least  'n  per  cent  of  the  stock  and 
thus  becoming  a  carrier  on  the  high  seas. 

Another  long  and  bitter  discussion  followed,  for  we  now  had 
added  to  the  ogre  of  government  operation  that  other  ogre  of 
extensive  government  control,  and  this  time  it  was  control  of 
the  private  carrier  by  the  Shipping  Board,  which  might  also  be 
his  business  rival.  The  bill  was  presented  in  January  and  passed 
in  September,  TJIT,  after  being  amended  in  May  to  provide 
that  the  Shipping  Board  should  disband  its  business  corporati^.n 
five  years  after  the  war,  sell  or  charter  its  ships  to  American  citi- 


10: 


t\Kr.tr\(K   OK    TMF.   GREAT    WAR    ir'«)N    SIIIPPINT, 


zcnt.  and  n-ll  its  i.iher  pMfxfrty  to  the  l)cst  atlvantaKc.  The 
political  charactt-r  o|  the  N.anl  uas  partly  elimiiiafe.l  l.y  retimv- 
ini;  troiii  JtN  per>nnnel  two  oi  the  Cabinet  utticcrs  j.«.  pnnide.l  in 
the  lir>t  dral't. 


TlIK  SlIiriMMl   BOARI) 

IVe-idetit  Wils.m  was  at  this  time  larrxiii;,'  out  the  policy  of 
nej,'otiatioii  and  iionpreparation.  IVrhaps  that  is  the  reason  he 
delayed  the  appointment  of  this  Shipping  i'.oard  '  three  and  a 
half  month-  after  its  anthorizatioi,.  until  Decemlwr  JJ.  \\v 
had  other  nu.nth.  of  ,|flay  helore  it  U-came  very  active.  Thii-. 
although  the  hill  j,'ave  extensive  control  of  ocean  freight  rates 
and  traffic,  the  I 'resident  tried  to  ,,|,tain  that  result  hy  exhorta- 
tion at  as  late  a  date  as  J„|y  n,  |.,.i7,  Witness  the' follouinft 
remarkahle  statement  from  his  jnihlished  messaKe  of  that  date 
to  the  liusiness  men  of  the  connlrv : 

I.et  me  turn  ff)r  a  moment  to  the  shipowners  of  the 
I'nited  States  and  the  other  ocean  carriers  whose  example 
they  have  followed,  and  ask  them  if  thev  realize  what 
obstacles,  what  almost  insuperable  obstacles,  they  have  been 
putting  in  the  way  of  the  successful  prosecution  of  this  war 
by  the  ocean  freight  rates  they  have  been  exacting.  They 
are  doiiij^  ^  crythinj,'  that  hi^h  freight  charges  can  do  to 
tnake  the  war  a  failure,  to  make  it  impossible.  .  .  .  The  fact 
is  that  those  who  have  fixed  war  freight  rates  have  taken 
the  most  efiffctivc  means  in  their  jiowcr  to  defeat  the  armies 
enga};cd  against  Germany  When  they  realize  this  we  may 
—  I  take  it  for  gratited— count  upon  them  to  reconsider  the 
whole  matter. 

This  may  have  been  needed  for  its  influence  on  public  opinion, 
but  It  is  difficult  to  take  it  as  a  serious  attempt  to  control  rates. 
It  came  two  years  and  seven  months  after  England  had  set  the 
rate  for  her  own  shipping,  years  after  we  had  set  the  rate  (jn 
railway  carriage,  and  three  months  before  our  Shipping  Hoard 

'  See  Chapter  X  for  an  account  of  the  Shipping  Board, 


AMKRHAN    COXTBOI.    AXO   OPEHATION    Of    SIIIPPINO       lOH 

used  the  povvero  it  liaci  then  had  (or  a  year— ami  *et  the  rate  on 
American  xhipping. 

After  four  and  a  half  mntuht  of  nninierriipted  inhmarine 
Kinking,  and  two  and  a  halt  miiiith'>  of  ssar.  our  SliippinK  i!oard 
finallv  liecamc  active.  L'onKr«"*s  pas-^ed  an  en)crj;ctuv  act  of  June 
1."..  |!»IT.  Kivinj;  it  additional  powers  and  incrca-iiiK  its  funds  to 
)H.Mm».(HM»,u(mi,  after  which  the  jjuvernnicni  l)C|;an  in  earnest  the 
wtirk  on  the  two  pohcies  of  encouraging  shiplmiidiug  (sec  Chap- 
ter \  )  and  shijjpinij  control. 


'ncheasing  Siiipimno  Fach.itik.s 

((I)  lUiilding  of  ships  by  the  government  In  addition  to 
starting  shipyards  of  its  own,  the  government  let  a  nunilier 
of  contracts  to  private  shif)l)uildcrs,  hut  this  pilicy  promised 
little  actual  increase,  for  the  reason  that  the  vards  were  Ixjoked 
ahead  witl;  for»;ign  orders  to  such  an  extent  that  it  was  said 
'_>.(MM».tHK)  tons  were  under  way  or  under  contract  for  foreign 
owners.  .Ml  of  this  the  Shipping  Board  requisitioned  August  -1, 
taking  not  only  the  ships  that  were  under  way,  liut  even  those  for 
which  the  keels  had  not  been  laid,  but  for  which  some  materials 
had  been  gathered. 

[b)  The  admission  of  foreign  vessels  to  American  coasting 
trade  b\  an  act  of  Congress  the  middle  of  Septemlwr  was  a 
distinct  though  needlessly  l)elated  aid.  The  attractions  of  the 
transatlantic  business  had  taken  vessels  from  our  coasting  trade 
at  such  a  rate  that  as  early  as  February  L't,  lOltJ,  the  linglish 
shipping  journal  Fairf^lay  rcportetl  that  s^)  |)er  cent  of  the  ves- 
sels engaged  in  .American  coasting  trade  had  left  their  accustomed 
routes  for  transoceanic  service.  The  traffic  thus  thrown  back 
upon  the  railroads  of  the  United  States  helped  to  increase  the 
congcstiin  of  their  tracks  and  terminals. 

(r)  Commandeering  of  neutral  vessels.  Following  the  ex- 
ample of  (ireat  Hritain,  our  government  has  virtually  com- 
mandeered neutral  shipping  through  the  bunker  f)rivileges. 
Without  coal  a  ship  is  helpless.     She  could  get  coal  only  by 


104 


ivFUKN'.K  or  ritr.  uurAT  war  i  pox  smrpiivr. 


promiMPf:  t„  r.-t.,m  ...  thr  I'nite.l  S.a.c*-n    '  v..l«n..,rv  ngrrc 
num      a^  a  rq.rrnntat.ve  nt  thr  Shipping  lloanl  .allo-rit.  snIiIi 
a  pcrf*i-tly  MraiRhi  face,     IU  th.,  mtaiw  ,natn  a  n-utral  vc»d 
has  Ik^.„  ,,,.,1  ,|..vv„  ,„  a  .|,.,„,i,e  rniitc  an.l  a  .lefinite  rare  in  the 
M-rviiT  .1  thf  Allicv     In  the  ca.o  „(  thv  rhitch  vr.^U  ue  ha.|  |., 
net  m.,rr  l.-nnally.    On  March  1^  the  I  n.tt.l  State,  jnind  the 
•)t.ier  AlhcH  ui  cmnian.leerinK  alxnii   l.<Mto..MH)  ton**  .,i   fhitch 
*hi,)pinK  which  lav  uithin  their  terrilnr.al  waters.     This  wa,  the 
hnal  c,mclu,i..n  uf  jon^  neK'otiati.ms  i„  which  it  vsas  claime.l  that 
the  Dutch  wnul.1  have  In-en  ^lail  f.  sivc  ii*  hv  vnh.ntars  agree- 
tnent    what    we   «ere   tinaliy  conipellol    tn   take.   l.iH   that    thev 
.lare.     not   ,1,,  ,.,  u-cause  nf   the  menace  -f   (ierman   reprisal 
.Sl.eakinK'<.t  this  npt.ra.i.m.  IVc.ident  Wilson  in  hi*  pr.x-Iamati..„ 
•  f  March  Jl.  ISMn.  said: 

Meanwhile.  ( ierman  threats  have  grown  more  vi-.lent  with 
a  v.ew  tM  prevemmn  a.iv  |H'rnianent  aKre.-ment  an.l  nt  i.,rc- 
itiR  M.-Iiand  to  violate  an>  temporary  aRreement.  .  .  I  „ro- 
foundly  sympathue  with  the  .|it>icultx  of  Hollands  nosi- 
hon  n.uler  the  n.enace  of  a  military '(..wer  which  has  in 
c\cr>  way  demonstrated  its  disdain  of  neutral  ridus  Mnt 
since  coercion  does  in  fact  exist,  no  alternative  is  left  to  us 
but  o  accomplish,  thr.muh  the  exercise  of  our  in.lispu.al.le 
rights  as  a  soverei^"  diat  which  is  so  reasonable  that  in 
other  circumstances,  uc  :oukI  \>c  confident  uf  accumplishine 
It  t)y  agreertient.  ** 

The  clement  of  bargain  was  furnished  bv  the  fact  that  we 
tuade  saciihces  l.y  graiitiMg  Holland  a  liberal  supply  of  food 
I"".'"H»  f.ns  of  grain.  \\\.  left  her  enough  shipping  to  supph' 
bcr  local  needs,  paid  literal  charter  rates  foe  the  vessels  w,.  took 
promise,!  to  return  tlu-n,  at  the  en.I  of  the  war  or  sooner" 
promised  to  pay  for  them  if  lost  bv  the  risk  of  war.  or  if  the 
.  wner  chose  to  wait  for  another  vessel,  it  would  be  .lelivered  as 
soon  as  possible.  Meanwhile  he  would  receive  interest  on  his 
"loncy.  The  crews  were  sent  home  in  a  Dutch  vessel,  staving 
■"the  intervening  ,)eriod  at  the  exjHmse  of  the  .American  nation. 
'  I'hiladelpUia  RulUtin,  ^f.•lrch  Jl,  ims. 


AMRRtCAX    CONTIIOI,    ANt»   llPKRATlnr^    or    -!|||.j.|Vii       |{»5 

After  lM?inK  taken,  the  I  hitch  «hip«  were  maiined  Ity  l'nite«l 
Si.ite^  Xaval  Uetrrvr*  It  wa»  |ii..ime«l  to  u^v  them  a^  muih  a» 
possible  outsiitli'  the  war  jconc 

Incmeaainu  Tiir  Sipplv  or  SAiLont 
In  anticifialion  of  the  need  for  increased  jtcwh  to  man  the 
new  'hipH  the  llmrrRcmy  I'leet  I'orix (ration  iMalih-hcil  a  Uc- 
criiitinK  Service  on  June  1,  lt»I7.  Henry  Howard  of  the  (  u-.tuni 
n<ai»e.  llo>tnti,  who  had  lirou(,'ht  the  matter  to  the  attcnti-iii  of 
the  linierKcncy  Fleet  (  or|M)raiion.  was  ap|Hiinied  director  '  The 
recruiting  service  involve*  the  training  oi  the  personnel  tor  all 
Ncrviccs  in  the  merchant  nuirine;  that  is,  ileck  oftia-rs.  engineer 
otticerH.  sailors,  cooks,  stewards,  oilers,  water  tenders,  firemen, 
etc.  For  this  work  two  ty|>es  of  scIuhiIs  were  estahlisheil,  one 
for  deck  and  engineer  officers  and  the  other  for  apprentice 
seamen. 

Schools  for  Peck  and  Enyinccr  Officers 

The  assi>tance  of  the  Massachusetts  In-fitutc  of  Technology 
wa-  secnrcil  in  taking  charge  of  the  teaclniig  in  Innh  the  en- 
gineering and  navigation  courses.  Dean  Ihirton  of  that  scIkm)! 
wa*  formerly  connected  with  the  Coast  and  <ieodetic  Survey 
and  was  an  expert  navigator.  Me  organized  and  trained  the 
navigation  teachers.  I'rofcssor  Miller  of  the  Steam  I'.ngiiucr- 
ing  (U'|)artim'nt  oi  the  .Massachun-tts  Institute  of  Technology, 
ill  like  manner,  took  charge  of  the  engineering  courses.  The 
country  was  divided  into  seven  section.s.  corresponding  as  closely 
as  possible  to  the  secti(jns  employed  by  the  Steaml)oat  Inspec- 
tion Service.  In  each  of  the  sections,  one  or  more  schools  were 
c.>tal)!i'hed.     They  are  as  follow.s: 

Section  1.  K.vtcnd.^  from  F.astport  to  the  I'onnecticuf  Kivcr. 
Navigaticjn   schools   at    Cambridge.    Mass..    (Gloucester,    Mass,, 

'  Mr  Howard  prii)r  lu  his  apiuiintmcm  was  Vice  Prfi<lfnt  of  the  Merri- 
mac  I  hinmal  (.ompaiiv.  He  hail  hid  t..ii«i.l(ral)k'  cxiK-ncno.-  on  the-  -ra 
a*  an  ;ir?iati'iir.  havitiK  \n-iw  a  yachtsman  «inir  fhf  niiv  ot  1.'  Id-  had  studied 
navi>;ation  and  had  had  about  twenty  years  of  experience  on  occan-goina 
stcatn-liips. 


li»6      i^rtvtsii'.  or  tiu  uhkat  wai  rmx  KMifprNii 

rorituixl.  NJ,iiiu'.  UiH-kLtnil,  Maifir,  ['roviilrfwr.  K  I  Kn|{i- 
iiMTini;  n'luMil,  M;i«   ItiMiluir  o(  lcchni)l«)gy.  lt<H|on. 

Srrliim  :.'.  Kxlpiuln  Ironi  thv  <  unnwiKm  Kiver  !•»  fape 
(  h,irle»  by  Norfolk  N'avi|;ati<iti  M'huoU,  K.tltiinorr,  N*e\v|Kirt 
.\t«».  iwi.  in  Xrw  York,  Nurlolk,  \  4  .  I1tila<lrl|)hi4  irul  Atlanlic 
I  ity,  IjiKJncrritv  «hiMi|»,  Strvrti*  ln«tiliitr.  HolM>kcn.  \  j., 
|uhti»  Hopkmi  L'niNcrtity.  liallimorf.  Mil. 

Section  ;i.  Kxtriul*  itum  t  aiw  (.  harlru  to  tape  I'loritia  One 
navigation  hHimI  .11  jack»onvillr,  i-'ln 

Section  I.  Include*  (iiilf  Sealxianl  from  lajie  Moriilu  to  Kio 
dramlc  Navigation  MrhiKils,  (ialve^jon,  Moliilc,  New  <)rlean», 
Lnt;ineeritnr  h-HimiI,  Tulanc  L'mvernUy  at  New  Orlean* 

Section  .'».  Incluite«  (alifornia  l'o;i»f.  Navtcation  «ch«)«)l«.  Lot 
Anijcle^.  San  Diejjo,  San  l-ranci!»co.  I'.iircka 

Section  t>.  Inchuleo  W  ashiiiKtofi,  tJresjon  Scal)oar«l.  Naviga- 
tion  •schooN,  ltt'llini;hani.  \\'a»h..  Portland,  Ore  ,  Tacoma.  \\'a<h, 
luiKineerint;  ^cIumiI,  InivirMty  ot  \Vaihin>;ton,  Seattle. 

Section  7  Incluilc*  the  tireat  l.akcH  NaviRation  «chnoU  at 
HufYaJo,  t'hicaKo,  Cleveland  aiul  Detroit.  KnKineerinc  «ch.vii«. 
Armt  iir  Inntitutc,  ChicaRti,  (  ha»c  SchtH)l  of  Applied  Science. 
Cleveland. 

At  the  head  ot  each  of  these  sectii>n»  ha-*  Iwcn  placed  a  busi- 
ness a"lniini»trator  who  is  servint;  at  a  salary  of  $.'»  |H'r  nionfh. 
riu-ie  nieii  are  not  necessarily  ac(|uainted  with  the  technical 
points  of  training  for  officers  as  the  instruction  in  the  schmils 
i>  under  the  direct  >.ii|)ervision  of  Dean  Rurton  and  l'roic<isor 
MilltT.  !)iith  of  the  Massachusetts  institute  of  Technology. 

Men  lietween  the  ages  of  1!»  and  .">.'>  who  have  had  at  least 
tw>>  years  experience  at  sea  are  admitted  to  the  schools.  No 
.itfenipt  i»  made  to  train  men  for  officers  who  have  not  had  the 
previnu*  two  \cars  sea  e.\|)erience.  C'antlidates  must  be  citizens 
'if  the  United  States  At  the  eiul  of  a  jwriiKl  of  training  of  from 
tour  to  six  weeks,  they  are  reipiired  to  take  the  usual  ofticers' 
examination  .if  the  Steamlmat  Inspection  Service.  If  exam- 
inations are  passed  successfully,  the  nun  receive  ap|>ointments, 
as  vacancies  occur,  to  positions  i,\)  ocean-goinp  steamers,  usually 
as  third  deck  ntlicers  it  third  engineer  officers.  With  further 
t\periencc  they  are  promoted  to  m'Tc  responsible  jKisitions. 


AMERiCAM    CU!<TIIOt.   ANI>  OfKHATION    or   »HIPriNli      l;»7 

On  March  'J,  lUtM,  there  were  rnrullnl  in  the  xhiMiU  (or 
«lcck  oftkcr*  «:U  *iti(lcnt«,  and  in  ihe  <»ch«n>|»  (nr  rnKweer  oftwcr*. 
'.'<):i  MtHlrtii*  l'|)  t.>  and  includinK  Dcccmtwr  I.  IIM7.  l.Md 
fttiHlent*  had  mmplrlrd  thr  cuur«e  <>(  training  It  t*  thr  aim  of 
the  rcTuiung  *rrvicc  oiily  to  meet  the  demand  for  utticef'*  and 
not  to  overtiiick  the  market.  Acrordingly.  in  thr  fall  of  ItMT. 
when  the  <iup|)ly  <ieemeil  to  Ite  greater  than  the  demand,  the 
rch(M)h  were  not  adverti4e<l  and  the  numlier  of  «tudent«  dc- 
rhne«l.  At  the  present  time,  howiver.  an  ctTort  t^  lieing  nnule  t>> 
ikei'ure  additional  tiudents  in  order  that  olVtccr*  may  \k  trained 
for  the  new  veitseU  twing  turned  out  hy  the  Shi|>ping  lloard. 
Student  officer*  are  nt>t  |>ai»l  while  in  training.  They  must  pro- 
vide their  own  lioard  and  lodging,  but  tuition  i»  free. 

Schools  for  Apprenlicf  Seamen 

For  the  training  of  »ailors,  liremen.  oilers,  water  tender*, 
c<K)k!t,  stewards,  etc,  two  training  *hips,  the  C'd/riii  Amlin  and 
the  Governor  Dinyky.  accotnmiHlating  lietween  five  anil  six 
hunilred  sailors  each,  have  liecn  |in>vide«l.  These  ship*  are  to 
l>e  kept  at  sea  as  much  a>.  lUissible  while  training  is  going  on. 
Particular  attention  is  Ixring  paid  to  the  I  >Mdling  of  lifeboats. 
This  course  of  training  lasts  frotn  four  ..>  six  weeks.  The 
men  arc  divided  up  into  gniups  according  to  the  particular 
work  they  <lesire  to  follow:  that  is.  sailors,  firemen,  etc.  Ovei 
each  group  of  ten  an  experienced  able  seaman  is  placed  as  an 
instructor  \x  the  end  of  the  course  of  training  the  men  are 
placed  on  ocean-goin^  steamers  as  onlinary  scatnen.  While  in 
training  they  are  paitl  $.'H>  a  month  aiKl  lH)ard.  h  is  planned  at 
the  pre-ent  time  by  the  recruiting  service  to  secure  additional 
vessels  to  Iw  used  as  training  ships. 


Re.vhran'gement  of  Smi'HNG  Resources 

The  most  elective  utilization  of  the  shipping  creates  haras- 
sing probleni'i.  for  tliere  are  two  calls  for  every  >hip  and  wc  must 
make  some  kind  of  a  choice.     For  instance,  in  October,  11)17,  a 


l!tS 


iNTi.iKNTr:  (1F  Tin:  fiRi:\T  war  rrox  siiiPPiNfi 


conference  was  held  in  Washington  hetween  the  National  Coun- 
cil (if  American  Cottun  Manufacturers  and  representatives  of 
trade  and  transpdrtation  in  the  attempt  to  speed  up  the  cotton 
movement.  Among  other  things  they  urged  upon  the  federal 
Shipping  Hoard  the  diversion  of  a  reasonable  percentage  of 
overseas  shipping  and  traffic  to  South  Atlantic  and  Ciull  ports, 
and  the  immediate  apportionment  of  a  maximum  amount  of  the 
available  coastwise  tonnage  for  the  transportation  of  cotton 
direct  to  \e\v  England  ports.  The  conference  also  urged  greater 
density  and  uniform  size  of  cotton  bales  in  order  to  increase 
the  capacity  of  cars  and  ships.'  In  Ma>  the  Council  of  National 
Defense  had  urged  the  withdrawal  of  ;;o.00(>  tons  of  coastwise 
-shipping  for  carriage  to  .-\llied  governments. 

At  least  five  rearrangements  of  facilities  have  been  made. 

The  Raikvay  Congestion  Problem 
In  the  attempt  to  relieve  railroad  congestion,  which  was  mak- 
ing port  congestion  and  interfering  with  shipping,  the  Shipping 
Board  announced  that  it  would  have  barges  built  tu  assist 
in  the  movement  of  ore  and  coal  on  the  Ohio  and  Mississippi 
rivers.  This  came  a  week  after  an  appeal  to  the  Shipping  Board 
from  the  lUth  .Annual  Convention  of  the  Upper  Mississippi  Im- 
provement As.sociation,  which  on  October  12  petitioned  the 
Shipping  Board  to  sell  or  lease  a  large  fleet  of  barges  to  en- 
able the  Mississippi  to  assist  in  war  work  by  carrying  ore.  This 
recommendation  was  made  in  the  light  of  successful  trips  of 
b«avy  barges  carrying  ore  from  St.  Paul  to  St.  Louis,  and  coal 
back  to  St.  Paul. 


Government  Requisitions  all  l.anje  Ships  and  Controls  the 
Charter  Rate 

Late  in  Se])tenii)er  tiie  Shipping  Board  announced  its  deci- 
sion to  rcf|uisition  all  ocean-going  merchant  vessels  above  2,500 
tons  dead-weight  capacity  and,  following  the  example  of 
Creat  Britain  with  her  Blue  Book  rates,  set  a  base  rate.     The 

'  See  47th  annual  report,  Xew  Orleans  Cotton  E.xchange. 


AMERICAN-    CONTROL    AND   OPERATION    OF    SMIPriNG       199 

American  rate  difTered  from  that  of  England,  however,  in  be- 
injj  a  very  hicrative  one  and  also  in  being  somewhat  below  the 
market  in  wliich  it  was  made.    The  liase  rate  was  $:>.:.-)  per  ton 
for  cargo  vessels  of  over  10,000  tons  dead-weight  going  up  to 
$7  a  tun   for  I'.r.oo  to  :t,()0o  ton  boats;  passenger  ships  with 
greater  speed  received  higher  rates  going  up  to  $10..-.o  a  Km 
for  boats  of  more  than  i:.  knots,     ft  was  also  planned  that  the 
War  and  Navy  Departments,  which  had  been  commandeering 
ships  for  their  own  use  at  varying  rates,  would  now  get  their 
vessels  from  the  Shipping  Board  which  would  do  all  the  re- 
quisitioning needed  by  the  government.     Naturally  shipowners 
felt  aggrieved  at  the  loss  of  profits  made  by  the  reduction  of 
rates,  and  there  was  many  a  protest.     A  shipowner  with  profane 
indignation  declared  he  would  never  let  the  United  States  Gov- 
ernment have  one  of  his  vessels  at  that  price,  that  he  would  go 
to  Washington  and  .settle  things.     The  Shipping  Board  reprV 
sentative  asked   him   what   he   wanted,   saving.    "You  have   a 
schooner  that  cost  $r.0,000  before  the  war  and  she  sold  for 
$75,000.  then  for  $100,000.  and  you  bought  her  for  $150,000. 
and  you  are  now  making  40  per  cent  on  that.     What  do  you 
want?"     "Why."   he  .said,   "the   shipping  business   was  bad 
before  the  war.    This  is  our  chance  to  make  some  money."    But 
he  took  tlie  Shipping  Board  rates. 

The  government  very  properly  and  very  reasonably  stuck  to 
its  policy  and.  what  is  of  even  greater  interest,  this  policv  was 
ere  long  enforced  also  upon  neutral  vessels.  So  much  of  the 
world's  trade  was  in  the  hands  of  England,  France,  Italy,  and 
the  United  States  that  there  was  not  room  enough  outside  for 
the  neutral  to  trade  unless  he  came  into  the  ports  of  some  of 
those  countries  or  used  their  coal,  and  so  it  was  virtually  a 
choice  between  taking  the  Allied  government  rates  or  lying  idle. 
The  government  rate  policy  was  admirably  shown  by  an  an- 
nouncement by  the  Shipping  Board,  February  20,  191S. 

The  Shipping  Board  is  endeavoring  to  control  the  rate 
situation  on  transatlantic  voyages. 

There  are  a  number  of  small  vessels  which  are  not  with- 


200  INFHi:\tK    OK    THK    GREAT    WAR    IPOX    SHIPPING 

in  the  rcciuisition  size  that  have  heen  making  these  trips 
under  exorbitant  rates,  and  after  consideration  of  the  mat- 
ter by  the  ship-control  committee  it  has  lieen  decided  that, 
after  February  l'o.  v.nfi,  no  American  steamship  under 
•2,'>t»)  tons  dead-\veij,'ht  will  be  permitted  to  clear  for  a 
transatlantic  voyage  or  to  engage  in  other  long  vovage 
trades. 

This  ruling  has  been  -dopted  by  the  United  States  Ship- 
ping Board  as  a  measure  of  conservation  and  economical 
use  of  tonnage,  since  in  its  judgment  steamships  of  small 
tonnage  are  uneconomical  and  unsafe  ir  the  trades  in  (jues- 
tion.  Steamships  ^j  excluded  will  be  employed  in  the 
coastwise.  West  Indies,  or  other  appropriate  service. 

On  the  23d  of  May  the  Shipping  Board  announced  that  on 
June  1.  it  would  reduce  the  base  rate  .">()  cents  per  ton  per  month 
on  all  boats  that  had  been  requisitioned  on  the  bare-boat  basis. 
For  other  vessels  on  which  the  owner  paid  the  crew,  etc..  the 
rate  was  unchanged. 

The  requisitioning  of  all  shipping  was.  however,  more  an  act 
of  government  control  of  industry  than  of  government  opera- 
tion. Its  purposes  were  twofold :  one  to  control  rates,  the  other 
to  see  that  shipping  was  utilized  in  places  and  trades  where  it  was 
most  needed.  These  objects  could  be  obtained  withou'  the  neces- 
sity of  actual  governmental  operation.  The  liners  were  at  once 
handed  liack  to  their  original  owners  to  operate  for  government 
account,  and  the  cargo  vessels  when  not  operated  by  the  Navv. 
War  Department,  or  Shipping  Board,  were  chartered  out  to 
brokers  who  operated  them  as  before.  Some  of  them,  particu- 
larly some  of  the  captured  German  vessels,  were  handed  over 
to  foreign  governments. 

Shipping  Moved  from  Pacific  to  Atlantic 

One  of  the  first  acts  after  the  requisitioning  went  into  force 
was  to  move  150,000  tons  of  .American  shipping  from  the  Pacific 
to  the  Atlantic,  thus  leaving  the  Japanese  in  charge  of  the  Pacific 
trade,  brt  giving  us  more  vessels  for  coast  and  transatlantic 
trade,     in  the  same  way  lake  steamers  were  transferred  to  the 


AMERICAN    CONTROL    AND   OPERATION    OF    SHIPPING       201 

Atlantic,  although  many  of  them  had  to  be  cut  in  two.  taken 
around  in  pieces  and  put  toRether  after  they  got  through  the 
canals.    This  process  is  still  going  on. 

Exchansc  of  Vessels  with  France 
Another  rearrangement  of  shipping  that  occurred  at  this  time  ' 
was  the  exchange  of  vessels  with  France.  Owing  to  the  help- 
lessness of  a  sailing  vessel  in  the  submarine  zone,  the  French 
Government  made  a  temporary  exchange  of  4l)(),t)0()  tons  of 
French  steel  sailing  vessels  for  150.000  to  200,000  tons  of 
steamers,  the  steamers  to  go  in  the  submarine  zone,  the  sailing 
vessels  to  be  used  in  American  trade  outside  the  submarine 
zone. 


Australian  Wheat  via  California 

Akin  to  this  last  arrangement  was  the  literally  far-fetched 
attempt  to  get  Australian  wheat  to  Europe  by  carrying  it  across 
the  Pacific  Ocean  in  sailing  vessels,  to  be  ground  in  California 
mills,  taken  by  rail  to  the  Gulf  ports  (for  which  service  the 
Southern  Pacific  Railway  made  slight  reduction  in  freight  rates) 
and  carried  thence  in  steame-s  to  Fv:;":e.  There  was  actually 
some  grain  movement  to  California  under  this  plan. 

All  these  changes  were  rather  bewildering  at  times  to  the 
shipowner  who  was  not  always  informed  of  what  was  going 
on  so  long  in  advance  as  he  would  like,  and  did  not  always  un- 
derstand it  even  when  he  knew.  For  example,  one  shipowner 
cited  the  case  of  a  schooner  that  he  had  been  loading  with  oil 
for  France.  He  had  secured  all  permits  necessary,  cleared  from 
the  Philadelphia  custom  house,  and  the  vessel  was  being  towed 
down  the  river.  At  League  Island  (below  the  city)  a  government 
cutter  called  her  back.  As  to  the  reason  why,  no  answer  except 
some  discourteous  remarks.  The  vessel  was  brought  back  to 
Philadelphia,  the  crew  ordered  to  remain  without  communication 
from  land.     The  tug  had  to  be  paid,  and  so  did  the  pilot  who 

'  Phi'adelphia  Public  Ledger.  October  20,  1917. 


-*>2       i.\ii,ri:\cK  OF  nii:  <;ki;.\t  \\.\u  vvits  shii'I'inc. 

was  alriady  ni,  hoard.  Two  (lays  later  the  captain  received  in- 
formatidii  fr.m  the  navy  that  sailing;  vessels  were  not  allowed 
to  prcicted  to  !•" ranee.  .\t  tlic  snne  time  other  sailinj,'  ves.sels  were 
loadinir  at  other  ports,  and  agents  thought  they  were  acting  in 
entire  propriety.' 

I'iu'  sinie  complaint  was  made  "  of  a  steamer  that  was  partly 
loaded  at  \ew  Urleans.  Thence  it  came  to  Philadelphia  to  com- 
plete cargo;  secured  permits  to  ship  everything  ihey  had  on  her, 
and  when  loaded,  alxuit  ready  to  go,  received  orders  that  she 
could  not  sail.  A  trip  to  Washington  to  lind  out  the  reascjn  she 
could  not,  lirought  no  answer  except  that  .>he  could  not.  and 
there  the  lioat  lies.  They  can't  get  her  (  tf,  and  can't  find  the 
reason  why  she  can't  go." 

We  h:id  to  create  our  ship  control  organization  with  great 
>l)eed,  and  upon  the  whole  there  seems  to  have  been  less  C(jm- 
plaint  from  shipowners  in  this  country  than  in  Great  Britain. 
Certainly  there  has  been  no  more. 


Tjie  Need  of  Oro.wization 

After  we  had  exercised  our  ])owers  of  taking  over  nearly 
everything,  we  duplicated  luigland's  e.xperience  by  getting  into 
trouble  th-'t  could  (jnly  be  cured  by  unified  control.  The  year 
1!U7  ended  with  an  autumn  of  gathering  trouble.  We  were 
now  sending  troops  and  supplies  to  France,  and  had  three  nearly 
indei)eiKlent  authorities  operating  ships  for  government  account, 
the  War  Department,  the  Xavy  Department,  and  the  Shipping 
Board.  In  addition  the  Shipping  Board  was  exercising  vast  con- 
trol of  the  movement  of  ships  by  licensing  every  voyage.  The 
traffic  both  upon  sea  and  upon  American  railways  was  greater 
than  the  facilities  could  handle.  It  was  naturally  a  period  when 
unsatisfactory  conditions  should  l>e  expected  to  show  themselves. 
It  takes  vast  planning  to  perform  such  a  task,  even  with  the 
leisure  and  possible  prearrangenient  of  peace.  When  haste  is 
added  to  war,  and  trade  exceeds  facility,  it  is  natural  that  in- 
efficiency should  occur,  such  as  some  of  the  things  reported  by 

'  hucrzicv,  December  2Z,  1917. 


AMERICAN    CONTROL    AND   OPERATION    <)|-   SHU'IMNi;       :.M»;i 

]<.  Ci.  Carrcill,  officially  credited  correspomlcnt  with  the  Ameri- 
can Army  abroad. 

After  iiisijcctirif,'  our  port  of  dcharkation  in  i- ranee,  he  told 
of  stcil  rails  hcinj,'  sent  hack  to  America  as  hallast.  of  knock- 
down houses  amonj,'  a  thousaml  jjarts  of  which  there  was  not  a 
complete  house,  of  three  days  spent  to  j;et  a  l)oiler  out  of  a  hold 
hec.uisc  it  tilled  the  hatchway  full  and  the  slings  which  should 
have  been  left  upon  it  had  been  removed  when  it  was  dro|)ped 
into  place;  of  cargo  so  mixed  that  Ixjats  had  to  be  shifted  from 
side  to  side  of  the  harbor  to  get  at  first  the  little  cranes  and  then 
the  big  cranes:  of  thousands  of  loose  maj^azines  and  newspapers 
for  suliliers'  reading  lying  loose  on  the  wharves:  truck  chassis 
waiting  for  six  weeks  for  their  trucks,  which  were  in  some 
other  vessel.'  No  one  could  be  blamed  for  the  fact  that  the 
attempt  to  reinforce  the  Italians  during  the  (.Jerman  drive  in 
December  made  it  necessary  for  France  to  utilize  her  rolling 
stock  to  such  an  extent  that  l'),()(H)  American  troops  lay  for  three 
weeks  on  ships  in  a  h'rench  port,  short  of  both  food  and  water. 
But  the  Patriotic  Education  Society  made  severe  arraignment 
of  the  general  conditions. 


The  government's  obsolete  methods  in  handling  sea 
transport  operations  are  causing  the  virtual  waste  of  a 
great  amount  of  tonnage.  .   .   . 

Consider  only  the  loss  due  to  the  convoy  svstem  as  oper- 
ated at  present.  First  of  all,  there  is  loss  of  time  while 
the  merchant  fleet  is  gathering  at  the  port  of  departure. 
An  ocean  liner  frequently  consumes  more  time  waiting  for 
its  companion  ships  than  it  formerlv  took  to  cross  the 
Atlantic.  Once  at  sea,  the  fleet  may  be  divided  into  two 
squadrons.    The  speed  of  each  squadron  can  not  be  greater 

Here  I  am,"  declared  a  frantic  looking  ship  operator  of  much  e.xperi- 
cnce  who  was  donatinf?  $20,000  worth  of  time  per  year  (at  prewar  rates)  to 
the  governTiient's  embarkation  service,  "tiying  to  dispatch  ships  for  the 
Koyernmeiit.  and  my  helpers  don't  know  the  bow  of  a  ship  from  the  stern, 
while  htnidreds  of  the  fellows  who  know  have  been  taken  off  to  the  army 
camp  where  they  are  no  more  account  than  any  wop." 

Uy  March  this  same  man  found  his  staff  grcatlv  improved  as  a  result  of 
the  adoption  by  the  War  Department  of  a  more  careful  attitude  toward  the 
relationship  between  a  man  and  his  qualifications  for  his  job. 


204         I.VFMKMi;    ()       TIIF.    fiRI-AT    WAR    l|"(\    Slllri'lNf; 

than  the  ^Ilct•(I  nl  the  slowest  vessel.  The  thvision  is  so 
iiiiscifmititally  handle.!  that  a  vessel  accustcned  to  travel 
at  litteen  or  twenty  knots  is  reduceti  to  ten  knots.  All  of 
thi>  means  that  a  fleet  ocean  Kfiyhonnd— we  will  sav  one 
"t  more  than  1,-.,(mm»  tons  capacitv— sometimes  takes  t'hirtv- 
ue  days  to  ,,'et  to  the  other  side,  when  she  is  capable  of 
maknij;  th.  passage  in  six  <lavs.  an  al.sohite  loss  of  alwnit 
l.>.<KM»  tons  a  month  on  this  one  vessel. 

Contusion  and  delay  in  the  movinfr  of  men  and  material 
are  another  result  of  adherence  to  red  tape  reRulations  and 
impractical  metho<U.  These  have  utterlv  broken  down  in 
the  present  j;reat  emer),'ency. 

Although  the  i)ersonnel  of  the  United  States  War  De- 
partment has  had  no  practical  experience  in  shipping  trans- 
portation, it  is  exercisinj,'  a  jurisdiction  over  intricate  and 
extensive  shippiiifr  operations  that  onlv  shipping  men 
familiar  with  large  problems  can  success'fullv  administer. 
Instead  of  regardinfr  transportation  operations  as  wholly 
a  business  consideration  to  be  handled  with  strictly  business 
methods,  army  ofificers  look  upon  them  entirely  from  a 
military  point  of  view.' 

An  American  exporter  of  much  experience  confirmed  at  this 
time  the  fretpiently  stated  estimate  that  shipping  was  being 
operated  altogether  at  about  :.(>  per  cent  efficiency  because  of  the 
delay.s  incumbent  upon  loading  and  unloading  in  crowded  ports 
(see  Chapters  II  and  VI),  and  the  further  great  delays  of  the 
necessary  conv(jy  system.  We  had  a  period  of  disturbed  in- 
dignation in  this  countrv-  much  like  the  one  in  luigland  that 
preceded  the  unification  of  shipping  management  there. 

One  -^hipping  company  whose  ships  have  been  com- 
mandeered by  the  Ijoard  and  are  being  operated  by  it, 
states  that  those  ships  are  not  doing  ."lO  per  cent  (jt'  the 
work  they  would  be  doiiiL;  under  private  management. 

"  See  that  steamer  out  there."  said  an  officer  of  a  steam- 
ship company.  "That's  one  of  our  commandeered  boats. 
'  P!iilailcl[iliia  Public  LedKcr.  Xovcmbcr  20.  1917. 


AMERICAN    CONTROL    AND  OPERATION    OF    SIIII'I'ING      205 

Til  my  positive  knowIeclRc  she  has  liccn  lyitiK  at  anchor  for 
three  weeks,  empty  as  a  tny  balloon,  waiting,'  t'nr  orders  from 
Washington.  The  chances  are  that  some  clerk  is  the  only 
jKTson  who  has  f)fficial  knowledge  of  the  status  of  that  Ixiat 
anil  has  forjjotten  to  tell  scjmelKxly  in  authority  about  it. 
Some  (lay  somelMxly  will  check  up  the  list  of  commandeered 
boats  and  then  it  will  l)c  discovered  that  a  :J.OOO-ton  ship 
has  been  wasted  for  weeks."  ' 

December  was  a  month  when  the  American  official  mind  began 
to  apjircciate  the  necessity  of  drastic  change.  Our  piers  were 
piled  almost  to  the  eaves  with  goods  for  export.  Freight  cars 
by  the  thtmsand  were  serving  as  additional  storage  houses,  and 
railway  freight  condititms  got  worse  and  worse.  Just  as  in 
England  they  C(msolidated  all  railway  systems  into  one  national 
system,  so  on  December  -2^,  1!>1T,  we  announced  the  unifica- 
tion -  of  American  railways  into  one  national  system,  and  the 
])ooIing  of  their  resources.  And  just  as  Sir  Joseph  Maclay. 
upon  Ix'ing  made  Controller  of  British  Shipping,  had  called  two 
years  before  for  a  reduction  in  British  imports,  so  plans  were 
begun  in  Washington  for  the  systematic  reduction  of  our  im- 
ports. 

The  January  Traffic  Crisis 

January  was  a  month  of  crisis,  with  alarming  conditions  which 
brought  drastic  changes  in  shipping  organization.  It  was  one 
of  the  coldest  months  on  record  and  one  of  the  worst  for  snow 
blockades.  On  January  1  there  were  7,()SC  carloads  of  freight 
standing  on  wheels  at  New  York,  and  for  six  North  Atlantic 
ports  there  was  a  total  of  41,108  carloads  of  freight  waiting 
for  export.  Port  congestion  made  it  necessary  to  handle  and 
rehandle  freight  in  warehouses  to  get  the  particular  consign- 
ments for  particular  ships,  and  to  shift  and  reshift  freight  cars 

'  Xczv  York  Tribune,  November  24,  1917. 

'  This  affords  an  admirable  example  of  inab-'ity  to  learn  by  the  experience 
of  others.  Our  railways  had  been  in  trouble  with  their  traffic  for  a  year. 
English  officials  had  urged  us  to  consolidate  our  railroads  to  get  ready  for 
winter,  but  we  waited  until  the  breakdown  became  acute  in  the  snow  blockade 
of  December. 


20fl 


INKl.tENcr    Dl-'    TMK    CRKAT    WAR    ri'ON'    SIIII'PINC 


in  till-  irnwdcd  .vanl^*  t.)  jjct  the  cars  with  piculs  tor  iwrticiilar 
*hi[iH,  all  of  which  meant  ticlay  in  Inadin);.  This  cuiiKr-tinn 
hail  many  i-aust-s:  increase  in  trartlc,  shorlane  ..i  sliips,  reinuval 
nf  exiart  men  hy  the  draft,  and  especially  the  breakdown  of 
the  ..Id  individualistic  •system  of  competili-m,  and  supply  and 
■  Icniand.  This  is  well  illustrated  hy  the  work  <.i  the  freight 
contractors  who  had  tor  many  years  sought  cargo  to  ^hip.  and 
then  souijlit  and  Ireely  found  all  the  ship  space  they  wanted  in 
which  to  ship  it. 

Avarice  of  foreign  freight  contractors  and  eagemfss 
<if  shippers  to  tiiove  their  export  shipments  is  ..ne  of  the 
causes  of  the  freight  congestion  in  New  York  and  one 
reason  why  thousands  of  freight  cars  are  tied  up.  accord- 
ing to  a  steani>hip  man  in  l'hiladel|)hia.  who  is  conversant 
with  conditions. 

Ihe-e  contractors,  he  aid.  are  speculators  in  the  freight 
market.  Their  method  is  to  iiook  certain  «ipace  on  a  steam- 
ship and  then  contract  with  shippers  to  move  their  freight, 
invariahly  charging  the  shij.iier  a  much  higher  rate  of 
freight  than  they,  in  turn,  paid  the  steamshi|)  company. 

Of  course,  he  said,  when  a  freight  contractor  hooked 
i'.«00  tons  of  freight  when  he  had  steamship  sjiace  for  only 
r.oo  tons,  it  means  that  l,.".(Mi  tons  of  freight  for  which 
there  was  no  >teaniship  had  come  to  the  sealxiard.  This 
freight  hlocked  the  yards  and  occupied  cars  that  might 
have  been  moving  freight  for  which  steamship  >.pace  had 
.  heen  reserved.  In  this  manner  thousands  of  cars  were 
brought  to  the  seal:  jard  and  added  to  the  congestion  already 
existing.  Sometimes  these  men  would  have  five  consign'- 
nients  of  freight  coming  to  the  scalxjard  when  thev  had 
room  for  only  one  of  them.' 

This  condition  of  port  congestion  with  the  resultant  ca. 
shortage  aggravated  by  the  snow  blockades,  caused  :.'i:i  ships 
to  be  waiting  in  \ew  York  for  bunker  coal  on  January  l."..- 
Aiter  a  week  of  strenuous  efforts  there  were  still  M  ships  wait- 
ing for  coal.     Some  of  them  lay  long  enough  for  coal  to  be 

'  I'liila(ltIphi.-»  I'uI'lic  I.edrjcr.  January  26,  1918 
=  Ibid.,  Jrinuiin  22.  1918. 


AMICliK  A\    fONTiOL   AND  OPEIIATION    nr    <.ini'riNG      l'(>7 

wnt  out  fr.ini  I'.nRlaml  to  'H\]y]A\  tlum.  Dne  Spani^n  vc^iel  in 
MampfMn  li,n,h  wan  compilled  ».,  hum  her  furniture  to  keep 
Mcam  pipvs  from  frw/itiK.  It  w:.>  ai  this  time  that  the  mal 
a.lmmiMraiioti  .•iifnraMl  its  almost  complete  temporary  shut- 
down <.f  American  coal  uninR  iiuhistrics.  whereliy  in  the  vicinity 
of  Xew  ^'ork  alone  lo.titMt  estalilishments  and  more  than  l'.i'<m»,. 
<HMI  emploNes  were  compelled  to  |,c  idle  -I,,  make  mailers 
worse,  it  was  at  this  time  that  Lor.l  Rhon.l.la.  the  llritish  Korxl 
Administrator,  sent  his  alarming  call  for  more  f»M.d; 

Unless  you  are  ahic  to  send  the  Allies  at  least  7.'»,0(M).(»im» 
bushels  of  wheat  over  and  alwive  what  vou  have  exported 
up  to  January  1  and  in  addition  to  the  total  ex|)ortal.le  snr- 
phis  from  t'anada.  I  can  not  take  the  responsii)ilitv  of  assur- 
mg  our  pcjple  that  there  will  be  fou<l  enough  t(j  win  the 
war. 

The  relative  conditions  of  New  York  and  Philadelphia  show 
the  need  of  some  of  the  drastic  reorganizations  that  promptly 
came.  Mr.  (ieorge  S.  Webster,  director  of  Philadelphia 
Wharves  and  Docks,  said  : ' 

There  are  vessels  tied  up  here  in  N'ew  York  that  are 
paying  as  high  .is  ^J.r.m  per  dav  demurrage  when  thev 
would  just  as  well  be  loading  in  Philadelphia.  Some  of 
these  ships  have  la-en  held  up  here  for  many  davs  because 
of  lack  of  coal. 

At  the  same  time  he  exhibited  a  map  for  the  port  of  Phila- 
delphia which  showed  that  at  noon  the  |)revious  day  there  were 
29  vessels  loading  at  Philadelphia  with  berths  for  12  more. 
Yet  at  the  .same  time.  D.  J.  Murphy,  boss  stevedore  of  Phila- 
delphia, complained  that : 

The  congestion  at  Pier  :!!»,  the  Quartermaster's  dwk  in 

Philadelphia,  is  very  bad  and  something  must  be  done  at 

<jnce.     Tbe  i)ier  is  piled  to  the  roof  with  war  sujjplies,  sup- 

lilies  which  should  be  on  the  wa_\   to  France.     In  addition 

'  I'ltiladi-lfhia  iiiilletin,  January  24.  1918. 


2oS      ixn.rE>n  F  nr  riir.  onrAT  war  ipo.v  amippino 

atitoiU'iltilf  irtiili*  lonclnl  witli  ■•uiiplic*  are  lirwtl  (i|i  for  »ix 
Miuarct  init-i<U'  the  pit-r.  W'v  tmiti  ha»T  mure  iliip*.  ami 
it  nui<*t  Ik*  <l«ine  al  once,' 

riaiiily  there  was  iieetl  of  system  in  the  control  of  traile.  from 
the  siiliin;.  at  the  farm,  the  mine,  tlie  fai-tory,  siraiKht  to  the  rail- 
v,a>  [Miri  Icrininai,  the  ship  and  the  \xm\t  of  final  consumption 
on  the  other  side.  Ihat  was  the  task  which  the  January  tie-up 
forcetl  int«>  the  teeth  of  the  Allies,  particularly  the  Anieri.an 
Shipping  Itoard  which  had  lieconie  the  chief  de|)ository  for  the 
authority  for  the  carrying  of  our  trade. 

Stki's  in  tiik  Okcanization  op  Siiippinc,  Man.voemknt 

A  numlwr  of  interesting  steps  have  h'-en  taken  to  hring  al>out 
that  even  flow  of  giMnls  so  necessary  to  the  l»est  utilization  of 
our  facilities.  The  Tide-Water  Coal  ICxchange,  njentior,e<l 
above  (see  Chapter  11).  is  a  perfect  example  so  far  as  it  r  ws 
•  if  hotter  utilization  of  the  coal  terminal  facilities  and  barges 
within  the  port. 


Improvement  in  Coal  HandliHi/  J'acilitii's 

On  March  -22  the  Shipping  Boanl  aimounced  that  it  was  sur- 
veying all  our  leading  seaports  to  see  how  coaling  arrangements 
could  be  enlarged  and  improved.  The  need  of  such  improvement 
was  cited  by  Joseph  A.  Hall.  Deputy  State  Fuel  Administrator 
for  New  York.''  when  he  said : 

New  ^'ork  as  a  p<jrt  always  has  been  Iwhind  the  times. 
The  port-  on  the  (ireat  Lake>.  for  example,  have  l^een  using 
machinery  for  loading  and  unloading  vessels  that  the  folks 
here  never  even  heard  of.  They  can  handle  more  freight 
and  coal  in  the  same  time  by  long  odds  than  can  Ix;  done 
here  iti  New  York.  Until  we  learn  something  from  the 
ships  aUjng  the  lakes,  we  will  never  solve  this  problem. 

'  riuhdclthia  HuUclvi.  J.inuary  24,  1918. 
'  Ibid.,  Jamiarj  ii,  1918. 


AMKMIIAN    COMTROL    ANt>  UPKRArioM    nr    SHIfHINU      'HW 

CoHlrol  of  Bartfct  ami  Tuijs 

Thr  pxamiilc  of  ihr  Tide-Water  Coal  I'.xchanKe  vva«  almost 
exactly  ilii|ilicnteil  by  Kiviiij;  mif  man  ■similar  authority  over 
l>ar|>CH  ami  tuK'*  in  the  coa<itwi»e  coal  trade. 

One  thinj!  more  than  anything  vUe  that  hcl|ieil  the  «|>ee<l- 
inK  up  <4  ve-.tcU  i^  the  jumer  jjivcn  to  (  aptain  l"ro\\le\  to 
tli>paiih  tuK"  from  here  and  alto  from  coal  |K)rt!i  with 
whatever  Iwrset  arc  rea<l>.  rc^ardlo"*  of  whether  or  not 
they  Ih'Ioiik  to  the  same  concern  that  own-*  the  tuR*. 

In  thi^  way  tows  have  lieen  kept  moving  where  tcriou* 
delays  miRht  have  retulted  under  the  ohl  methiHU.  In  other 
words,  (.'aptain  trcjsvley  has  complete  control  of  the  fleet 
of  tu^f*  and  ItarKes  lK)th  an  reKanU  their  movement*  and 
the  |Kjrt!t  at  which  they  shall  load  and  di>charge.' 

Tlw  Official  Speedcr-up 

The  Shippiiig  Board  sent  men  to  the  variou-s  port*  who.*e  task 
it  was  to  see  that  vessels  were  lieing  handled  with  all  the  speed 
possible.  One  of  the  finding's  in  this  piece  of  work  was  that 
when  a  vessel  entered  Philadelphia  she  had  to  make  five  stops 
lietwcen  the  breakwater  atid  the  fnirt  for  examination  by  sundry 
Kovernmcnt  departments  when  shipping  men  .said  all  the  in- 
spections could  have  Iteen  made  at  one  time  and  place. 

War  Port  Boards 

In  the  autumn  of  1!»17  War  Port  Hoards  were  appointed  in 
several  of  our  ports.  That  in  New  York  hati  men  from  the 
Shipping  Board,  Navy  Department,  and  War  Department,  sit- 
ting with  a  |)reviou>ly  existing  joint  Iward  appointed  by  the  gov- 
ernors of  New  York  and  New  Jersey  >vhich  had  l)een  working 
on  the  (juestion  of  the  orderly  development  of  the  port.  This 
new  board  found  that  the  various  government  department  heads 
were  ru'-hing  freight  to  New  York  as  fast  as  they  could,  hoping 
for  ships  to  nuive  it. 


'  Letter :  Huston  Cliambcr  of  Commerce,  February  14,  1918. 


tflO 


IV    UKMlK   or   TMR   r.MAT   W,«    IP(»!«    MMtiriK,; 


i'oiyrdinalioH  of  l-rfiglu  ami  l-adlilks 
(hir  ..f  the  rtr«i  ihiiiR.  ihi«  Itoanl  <lii|  «a»  to  aiimi|.i  i..  get 
Wa'hinittnii  aiiil»..ritir<  t..  wi.rk  out  r..ulitiK  plan,  whereby 
K«>"«N  v\. .1(1,1  cirir  to  tlu-  |».irt  .mlv  wlu-n  ,hi|t»  wrrt-  then-  t^ 
l.amllc  than.  Ihi%  wa,  aitmiplcil  l.y  iht-  gemral  ..|KTating 
K.nimiittT  .)(  the  c.itlrrn  railr..:.<lv  and  l.y  miilwinUT  they  were 
makini;  a  HyMrmatic  attinipt  tw  rcxnlari/e  e\|Hirt  movenicm*. 

Ik'fnrc  thi^  cnnnirtiT  will  allciw  a  .hipniciif  |..  .ian 
fri.ni  the  imrri..r.  it  .i^ceriain,  fr.mi  the  .tcani-ihip  c..nipaiiv 
nhi-thcr  r.Nxn  aitiialK  h.i.  Utii  ri-.er\c.|  tor  that  carj;'* 
aii.l  that  cxporitr,'  JKfiin-.  have  U-t-n  ..l.taincd  In  thi* 
niannt-r  in.  r.mhN  are  alh.wcil  ti.  ctiic  f.»ruar.l  nntc.  a 
»hip  I-.  rea«l>.  Iven  llnti  the  ■.hipnunt  In  not  allowe.l  to 
Mart  from  the  ifti-rior  unle.«  the  ^hip  i»  m  -i^jht  or  in  the 
|K»rt  where  the  carK'o  i»  to  W  loadeij.' 

Thi-»  proMern  -howed  the  real  •.itnatioii.  \\\.  had  lot  \et  de- 
veIo|*d  the  concept  .1  a  uniticalion  in  control  in  treij^ht  han- 
dliiiK  to  take  charue  when  the  excess  ..f  traffic  over  facilities  broke 
dimn  the  old  niiorj^ani/ed  individnalfstic  svsteni, 

An  even  greater  lack  was  di>covered  in  that,  despite  the  fact 
that  war  is  an  economic  stniffKle.  we  had  had  no  econo  nic  ^en. 
eral  «ta»f  kick  of  war  activities  in  either  industry  or  iransjH'rta- 
tion.  A.  an  evidence  of  the  [lossibilitie^  in  this  ticM.  onie  |>er- 
sons  Idieved  at  the  en<l  of  jannarv  that  at  lea>t  a  million  tons 
of  sliijipin!,'  would  k-  Kainefl  by  the  new  plan  of  diippin^r  co- 
ordinal     m  that  had  been  just  tlien  agreed  ii{)(,n  at  Wadiinuton. 

Mr.  Iln.ry  I.,  (iantt.  ctticiency  engineer,  in  speaking  of  our 
industrial  ilifficulty,  said ; 

^  ^The  lational  niacliine  is  built  wronj;.  Divided  re.s|)onsi- 
!)ilay  in  governmental  work  has  been  rcNfionsiblo  for  more 
messes  than  yon  can  think  oi 

Perhaps  the  way  to  dvw  that  we  were  -ailiiij;  without  economic 
|)ilots.  is  to  repeat  two  t|ne-iioiis  and  answers  ;;iven  and  received 
ijy  Mr.   Lincoln  Colconl,  who.  |,y  ()uestit)niiijj  the  head  of  the 

'  l'iiil.i,l<l|,li,a  /'«'>/i,-  Icdii.r.  Jaimar>  li>.  1918. 


.\MuiiL'A.v  c(>>ifiii>i.  AMI)  orrMTioM  or  riuppimu 


Ml 


War  iVitartnirtii  iiixl  thr  hciil  •>(  ihr  Sht|>|>'i)K  Itoanl,  «h»wetl 
that  the  real  |tr<>l)lent  then  had  no  <»nc  to  pmvi'lc  (or  it. 

y.ic«iioii — NVho-M-  hui»iiMr«<  i«  it  to  *»\  how  the  prfienf 
avaiblilr  American  -thip  ii innate  "hall  !«  uorti  to  the  hr^t 
a>lvnnta|;e? 

Chiiirman  Hurley — ITiat  i*  ili^inctly  a  (|»e'>tion  (or  the 
Secretary  of  War  to  itecitle. 

yiie«tioii  —  \\  ho«  t>U"ine«!«  U  ii  to  »ay  how  the  pre»ent 
availaMr  Antrricati  »hip  tonnage  «halt  Ik*  tmeii  to  the  liett 
advanlaKe  ? 

Secretary  Hakcr — That  i*  •liMinctly  a  (pieMion  for  the 
ShippittK  lloanl  to  itrcidr 

"  I  am  here  only  to  supply  ihipn,"  iwiil  Mr.  Kttrley.  "  If 
Mr.  Hakcr  come*  to  me  and  want*  twenty-tivc  »hip».  I  have 
to  ({o  out  and  K^t  them  for  him  I  have  nothing;  to  do  with 
his  war  platis.  lie  tuakcs  up  hi'*  p'aiis.  estimate"*  how  many 
ships  he  'vill  need  atul  then  come*  to  me  for  the  ship*," 

"  r»ui  supjHise  there  wa*  a  *erinus  nhortaRc  of  ship*,  and 
you  knew  it.  atul  .si.p|H)»c  you  had  to  take  ship*  from  a  tiehl 
where  they  were  vitally  needed,  what  w<iuld  you  do?" 

"  That  is  "ot  my  liusiness,"  he  answered.  "  My  business 
t»  to  bui'.d  jihips  and  ga  ship*  and  run  ships."  ' 

No  chaos  in  imiustry  i*  too  great  to  result  from  such  chaos  in 
plan.  It  i*  scarcely  rcasonalile  to  expect  thorough  ])lans  to  Iiave 
Iwen  Worked  out  for  m>  large  and  so  ticw  a  prolik-ui  in  *o  short  a 
time.  The  staff  idea  an<l  advance  plans  have  lieenat  a  low  el»h 
in  the  I'nitcd  State*.  .\nd  unfortunately  we  are,  as  a  nation,  still 
largely  in  that  uiulirecteil  condition,  hut  moving  step  by  step 
toward  an  ordered  national  effort.  The  .ship  was  one  of  the  first 
things  to  U-  ordered  Iwcausc  it  was  one  of  the  first  things  to 
liecome  jwiin fully  chaotic  and  acutely  scarce. 

Shippimj  Control  Committx'C 

After    this    lack    of    plan    had    brought    its    natural    reiiilts 
of  general  confusion,   we  were  ([uite  willing  to  act   upon  the 

'  Philadelphia  PubUc  Udgtr.  Oclobtr  17.  1917. 


:\: 


i\Fi.ri:\ii    OF  Tiir-  cukxt  war  tP(.\  siiri-nN-f: 


previously  made  I'.ritisli  >U'^^v<Unn  ,-m.l  app-unt  a  .hipping;  cn- 
trul  comiimiiT  which  >h.nil(l  nniiy  the  omtml  nr  AnuTicau  ^hips 
and  to  -,,  w.t  inrthcT  hy  p..,,lin^r  ,i,^.,„  „j,,,  ,,„^    ,^|,j^,.       ^-^^^^ 
a  coiiUTfiK-c'  two  cminiiitccs  uerf  tMrim-.l.     Messrs.  I'ranklin 
.•iP'l  Th.r.-as  ,,f  the   Internatinnal   Mercantile   Marine  and   Mr 
Kaym.Mul   ni    the  Chde   Line,   were  the   .\nierican  cnmniittecN 
ulnle  .Me>.>r>.    Fhonia.  and  Raymond  nf  ihis  cmmittee  an.l  Sir 
t  .Mnuip  (rtithne.  representing  the  llriti^h  Admirahv.  t,.uk  charge 
"t   "iteralhed  affairs.      The  cn„„nittee    was  tjiven'  antlinritv   tn 
divert  any  and  all  shippinj,.  to  whatever  ports  seemed  l.e^t  al.le  to 
handle  it.      1  hns  vessels  hound  t..  the  congested  port  oi    Xew 
\nrk  could  he  ordered  hy  wireless  to   i'hiladelphia.   Baltimore, 
or  Charleston,  or  wherever  the  hest  opportmiities   l(,r  h.adinj,' 
were  to  he  had.    There  was  no  law  },rivini,'  the  cniniittee  author" 
ity  to  tell  American  shippers  to  what  ports  thev  nuist  send  their 
.t^loods,  hut  l,y  its  control  of  ships  this  new  cmmittee  could  tell 
ti>e  shipper  that  the  vessels  to  carry  his  goods  were  to  clear  from  a 
certain  port  and  he  had  no  ch,,ice  hut  to  send  his  fjoo.N  where 
the  ship   would   he.      This   new   cmmiltee   hrou^rht   und.r  one 
control  ships  that  had  previo„.lv  heen  operated  I.v  three  inde- 
pendent  ami   hy  no   „,eaiH  oveririendiv   <iepartments :   namelv 
naval  transport,  armx-  transport,  an.l  the  Shippin-  iJoard      Inci- 
dentally also  the  personnel  >howe<l  the  conversion  of  thr    \dmin- 
istration  to  the  policy  of  placin-  Inisiness  in  th-  hands  ,,1   the 
men  who  know.     It  i.  to  he  ],oped  that  all  this  comhinatio,,  of 
new  authorities  will  make  imposMhle  the  recurrence  of  ,uch  a 
criminally  wasteful  epi>o.le  as  the  following  e.xample  of  delav 
while  individuals  (juarreled  over  profits. 

A  sailinj,^  vessel  loaded  with  oil  for  France  had  secured  ad- 
vance payment  of  freight.  .\s  she  >tarted  to  sail  she  was  ordered 
back  hy  a  captain  of  the  navy,  and  lay  at  her  berth  in  i,llene.ss 


AMIUKAN     CONTKOL    AM)   (UTKAl  Il).\    OF    SIIII'IMM;       Jl."! 

froir  'iW  "ii;  lay  nf  Scpteniher,  I'.MT,  until  tlic  I'-'d  of  tin-  cn- 
sui.^  '.iniiary.  ■..!■.,;  at  la>t  with  a  lawsuit  still  pciidin^^  inr  the 
pff  ail!  ireii^ht.  ii.  cargu  <if  nil  was  (lisi-liarjjcd  intn  an  army 
trai.'iM.rt,  aithuuj^' i  the  transport  at  thu  time  could  not  get 
coal  ivj  sail. 


.  /  SiifTciiic  Sliif<piiuj  Ci'tiiiiil 

r>till  further  to  unify  plans  and  if  possible  to  increase  the 
efficiency  of  shijjpin^'.  Colonel  House  on  his  visit  to  luirope 
late  in  r.tlT  suggested  an  Allied  Maritime  Transport  Council 
which  held  its  first  meetiii},'  in  London  on  March  i.'J.  I'JIn,  when 
the  following  announcement  was  made : 

The  council  will  have  a  permanent  f)rganization  consist- 
ing of  four  citizens,  one  for  each  government.  The  council 
will  obtain  through  its  permanent  staff  programs  of  import 
requirements  for  each  of  the  main  classes  of  essential  im- 
ports and  full  statements  as  to  the  tonnage  available  to  the 
respective  governments,  it  will  examine  the  import  pro- 
grams in  relation  to  the  carrying  power  of  the  available 
tonnage  in  order  to  ascertain  the  extent  of  any  deficit  and 
will  consider  means  whereby  such  deficit  n'lay  be  met, 
whether  by  reduction  in  import  programs,  by  acquisition,  if 
practicable,  of  further  tonnage  for  importing  work,  <)r  by 
inore  economical  and  cooperative  use  of  the  tonnage  alreaily 
available. 

The  members  of  the  council  will  report  to  their  respective 
governments  with  a  view  to  makii'g  sure  that  the  action 
recpiired  to  give  effect  to  any  recinmendations  made  by 
the  council  are  taken  in  their  respective  countries. 

Controlling  Commerce  to  Relieve  Shipping 

Reducing  Ttadc 

In  order  to  economize  ship  space,  we  are  controlling  trade 
along  several  lines.  The  most  important  is  the  cutting  off  of 
trade  that  can  be  spared.  \'ery  significant  was  the  announce- 
ment, I'ebruary  'J,  lUlS,  that  the  Shipping  Board  had  created  a 


i'H 


i.SFi.iKNci:  oi-  nil-  ,;r,:at  war  tpo.v  siuppint. 


.l.v.s,„n  o.  planning  an.I  statxtics  with  E.  F.  (iav.  Dean  of  the 
iarvani   (,ra<luatc.   Schnnl  „f   Bu.sincvs  Adminiitra.in,,    at   it. 
lK-a<i.      Ii„s  (l.v,.s...n  wnrks  with  the  War  Trade  IJoanl  in  dc- 
terniminjr  what  imports  an.I  exports  can  l,e  reduced  and  elimi- 
nated.    s,x  weeks  later  the  War  Trade  Hoard  announce.l  a  hst 
of  articles  whose  import  wo«l,l  be  restricted  almost  to  the  point 
o.  l)roh,l„t,on  after  April  i:..     It  contained  eij;htv-four  classes 
I.c«mnmj;    with    a^ricnltural    implements    and    including    such 
classes    as    the    manufactures    of    vej-etahle    fibers   and    textile 
grasses   except   jute,   gold   and    silve-   manufactures   inchuling 
jewelry,    manufactures   of   wool,   goafs   hair,   camel's   ha,r   nr 
all-aca.     Some  estimators  thought  that  l,.-;(H).ou(>  tons  of  shi,)- 
piiig  had  been  savei'  by  this  one  act  alone.  ' 

I'orciijn  Trade  Rcduciu<^  Stuff 

Meanwhile,  in  order  to  facilitate  this  process  of  tra.le  reduc- 
.on  the  Shipping  I3oanl  reporte.l  early  in  March  that  it  alrerdv 
had  representatives  in  Lon.lon.  Paris.  Berne.  Scandinavia.  Kio 
Janeiro.  Luet,os  Aires  and  Tokio.  and  was  rapidlv  completing 
a  I'-reign  staff  of  commercial  representatives.  The  State  De- 
partment also  was  sending  commercial  attaches  abroad  to  assist 
^v.th  the  work  ot  licensing  and  reducing  imports  to  this  country. 

Stimulating  Home  Production  of  Imported  Articles 
^Secretary  of   the   Interior   Lane   asked   Congress.    February 
-.i,  tor  a  special  appropriation  so  that  a  large  force  of  metal- 
lurgists could  be  employed  at  working  otit  necessarv  changes  in 
practice  that  would  enable  us  to  use  lower  grade  and  local  sup- 
plies ot  tneta  s  of  which  we  now  import  2.000.000  long  tons  a 
ea     most  of  which  might  be.  on  an  emergency,  produced  at 
home^    I  or  instance,  nitrate,  sulphur,  manganese,  flake  graphite 
o    cnici  les.  tin.  mercury  for  explosives,  potash  for  explosives, 
and  fert   izer:  tungsten  tor  high  speed  steel,  antimonv  for  har.l- 
enmg  bullets,  zirconium  for  armor  plate,  and  tool  steel',  and  mas.- 
ncsite  used  as  refractory  in  metallurgical  plants 


AMERICAN-    COXTKOL    AND   OPEHATIOX    OF    .SllIl'l'lNc;       21.') 

Scu'iitific  Loading 

Kcducinj;  the  hulk  of  exports  and  imports  is  another  fruitful 
field  for  work.  For  decades  when  sjjace  was  cheap  and  the 
transatlantic  journeys  short,  we  loaded  ships  with  a  hvdky  cot- 
ton hale  that  would  fill  the  ship's  hold  full  and  *till  leave  most 
of  her  huoyancy  unutilized.     Thus. 

American  cotton  bale  of  l*2  I1)>.  per  cu.  ft.  takes  loi'  cu.  ft.  a  ton. 

Mfiyptian         "      "     '•  :i7  Ihs. co 

Indian  and  Chinese     "  .".U  lbs. 40  "     "   ••    •• 

This  means  that  a  .".,(M)(»  toh  ves.sel  having  -Joo.iMjo  cubic  feet 
of  space  could  carry       l.lKiO  tons  of  American  cotton. 

.■i,:i;i.'i      "     "    Egyptian       " 

r.-dOO      "     "    Iiuiian 

A  t!,00(),(M)0  ton  crop  would  require  ;5,(Kil  vosels  loaded  with 
American  bales,  but  only  1,lH>()  vessels  loaded  with  Indian  bales.  ' 
I'lainlv  we  must,  before  another  cotton  crop  is  moved,  smash 
established  anil  vested  industrial  conservaf  it  this  point  and 
make  a  cotton  bale  which  is  as  good  as  th'  dian  cotton  bale, 
and  save  a  whole  flotilla. 

Manifestly  many  other  comm(xlitic>,  especially  fabrics,  are 
capable  of  similar  compressicjn.  Instead  of  canned  foods  70 
or  Ml  or  i'O  per  cent  water,  bulky  with  tin  and  wood,  we  can 
send  dried  foods  in  paper  and  burlap  sacks.  Boilers  were  .sent 
to  I-nmce  in  plates  and  erected  there.  Gun  carriages  also  are 
being  sent  to  l->ance  in  pieces  for  erection.  The  whole  cjuestion 
ot  scientific  baling  and  packing  is  one  to  which  attention  has 
iiever  been  given,  lor  the  object  of  trade  has  been  to  please  cus- 
tomers rather  than  to  save  freight  space.  Very  considerable 
econ..mies  in  tonnage  may  be  expected  from  this  source  during 
the  year  I'.Un,  and  later. 

Under  .scientific  loading  we  might  include  concentration  of 
freight  at  sjjccified  ports  so  that  no  steamer  would  consume  time 
by  loading  at  two  ports,  as  is  the  common  custom. 

'  U.  S.  Commerce  Reports,  October  11,  1917,  p.  153. 


21ti       i.MLii:\n:  til'  Tin:  i;ki:.\T  \\.\u  was  siiirriNO 


Contusion 

\Vc  now  liave  our  shijipinj;  reduced  to  the  status  of  an  arm 
(.f  the  jjovcriinieiit.  We  may  think  ni  the  ship  as  a  comijanv  or 
regiment  of  sulchers  which  operates  --infjly  or  in  f,'roui)>,  svith 
others  lit  its  kind,  <)i)edient  to  the  orders  of  tlie  supreme  com- 
mand. This  very  },'reat  ditTerence  is  to  he  pointed  out.  The  ship 
and  its  company  are  an  independent  unit  of  civilians,  the  old  in- 
tiividualism.  even  though  ohechcnt  to  the  supreme  command  as 
to  when  and  where  and  how  the  ship  goes,  what  it  carries,  and 
at  whit  rate  of  freight.  It  is  still  a  jirivate  business  enterprise. 
To  all  intents  and  purposes  it  is  a  contractor's  (jutfit  working 
ff)r  a  government  that  has  taken  its  services  for  a  time.  This  is 
war  policy  and  this  condition  is  to  last  for  the  i)eriod  of  the 
war — at  least,  hut  the  ship  skill  is  jjrivate  skill,  not  government 
skill.  This  raises  to  a  higher  degree  of  interest  the  question  of 
postwar  policy  which  is  discussed  in  another  chapter. 


CHAPTER  VIII 

Shipbuilding  during  the  War — Technical  Development 

Early   Stagnation'   and   Revival  in   Biildinc. 

During  the  first  weeks  of  the  war  the  stagnation  of  the 
shiiijjing  trade  was  transmitted  to  the  already  c(|ually  stagnant 
shipbuilding  trade.  While  ships  lay  idle  and  a  supjwsedly  short 
war  pressed,  there  was  no  tetnptation  to  build  more  ships,  and 
it  was  the  general  opinion  that  there  would  Ik;  no  building  dur- 
ing the  war.  In  .August.  l!tl  i,  more  than  1,500  men  enlisted 
ill  a  single  week  end  from  the  great  shipyards  of  Harlan  &  Wclf 
at  Belfast,  the  builders  of  the  Maiirctania.  Lusitatiia,  and  many 
of  the  crack  ships  of  the  British  fleet. 

In  November  the  world  of  shipping  discovered  the  war. 

The  realization  that  the  war  was  to  be  long  and  that  ships 
were  to  be  scarce,  deluged  the  world's  shipyards  with  two  kinds 
of  orders  at  the  same  time,  naval  and  m  rcantile.  With  this 
double  pressure,  shipyards  have  worked  with  ever  increasing 
speed  from  the  autumn  of  lit  14  to  the  present  moment,  luiergy 
has  not  been  limited  to  the  mere  matter  of  building  ships.  There 
has  been  equal  activity  in  the  question  of  design.  The  war's 
emergency  in  combat  has  called  for  new  types  of  fighting  ships, 
and  the  war's  emergency  in  trade  has  called  for  simplified 
types  of  freight  ships. 

Naval  Work 

Some  of  the  early  battles  of  the  war  demonstrated  the  great 
imp(jrtance  of  the  fast  battle  cruiser,  but  did  not  remove  the  final 
dependence  upon  the  heavy  battleship,  so  there  have  been 
orders  for  battleships  and  battle  cruisers.  Meanwhile  the  fight- 
ing of  the  submarine  became  the  pressing  order  of  the  day.    For 

'iU 


iMS 


iNFLiiNii:  or  Till.  (;hk\i'  w  \u  i mv   shipimm; 


this  piirjxi-c  tluTc  has  hccn  openly  ivi.luiiDi'  in  ty|H'  <if  vessel 
as  the  siiljitiarinc  lias  Iwcuiiic  lari^i-r.  \t  first  a  small  niotor  hoat 
with  a  lif;ht  j,'uti  Mifticfd.  ami  it  is  reported  that  .'..".o  nf  thcin  ucre 
liuiit  ill  the  United  States  tdr  the  liritish  Navy  in  the  first  two 
year>  of  the  war,  hut  imw  tliat  the  -nhtnarine  has  j^ot  to  carrying 
heavy  j,'iins,  these  small  ve-<els  tin  longer  suflice.  The  enerjjy  is 
liein),'  fdcnsed  upon  destrnyers  and  tlyin;,;  hoats.  and  a  new  type 
(if  m()>(|Liitii  craft  called  ea^'les,  hein^  hiiilt  hy  Henry  h'ord. 
Their  chief  function  i>  depth  luinliinfj. 

A  >eci  lid  >pecial  t>i)e  of  In  .at  designed  (or  >ervice  in  the 
war  ha^  I.eeii  the  troop  diip  with  hij^h  speed  to  dodjje  the  sub- 
niarine.  It  also  ha>  many  compartments  and  large  size  to  take 
-several  torpedoes  and  still  float. 

Merchant  I  'csscls 

For  the  decade  before  the  war  the  attention  of  the  reading 
puljlic.  when  called  to  ship])infj  at  all,  was  called  to  this  or  that 
fast  iia>sfnp;er  ship,  which  attracted  attention  by  its  speed,  its 
size,  its  luxurious  appointment^  its  elevators,  its  swinimint; 
pools,  its  close  approach  to  a  jrreat  floatinj;  hotel.  The  war  has 
elevated  to  a  prime  position  the  tramp,  the  common  carjjo  car- 
rier for  which  natitms  strive  and  pray  ami  pa).  The  awful 
demand  for  speed  in  turiiinj,'  out  these  ships  to  beat  the  subma- 
rine has  set  the  technical  world  into  a  fever  of  study  of  ways 
to  f,'et  them  made  (juickly.  with  the  result  that  we  are  tiow  wres- 
tling with  new  types  of  design,  new  methods  of  construction, 
and  new  materials  of  construction. 


Nkw  Tvi'ES  OK  Design 

((/)    Tlu- Corni(/ali'd  SIiif> 

The  simple  <!cvice  of  corrugation,  which  is  well  known,  gives 
added  strength  to  material  built  to  that  form.  This  fact  is  be- 
ing usefl  to  some  extent  as  a  factor  in  material  saving.  The 
ship's  side  is  corrugated  to  give  it  strength  which  in  other  cases 


siiipni'ii.niNc.  m'RrNr,  tiii:  war 


2J!> 


it  attairi-;  hy  greater  use  of  frame  work.  Such  ship'*  are  lieinp 
hiiilt  in  the  United  Kingdom,  but  their  numher  i>  nut  Kttat  and 
they  art  not  ai   'injjortant  factor. 


( l> )    Stamlartli-cd  Ships 

Of  all  kinds  now  tniilding.  the  standardized  ship  has  attracted 
the  most  attention,  hut  the  standardized  steel  shij)  upon  which 
so  much  thought  and  so  much  u.)rk  are  heinfj  expended  may 
not  he  the  only  type  that  will  he  important  in  heli)inK'  in  carry 
freight  to  win  the  war.  That  honor  may  he  shared  hy  the  cement 
ship. 

The  standardized  construction  has  heen  adopted  as  the  official 
method  hy  the  Rovernments  of  the  United  Kingdom  and  the 
United  States,  Iwth  of  which  are  huildinp  ships.  In  this  country 
standardization  did  not  have  the  hitter  opposition  that  was  met 
in  Great  Britain.  It  is  easier  for  us  to  do  it  than  for  the  IJritish. 
k'cause  we  are  a  less  conservative  people  in  industry,  more  ex- 
perimental, more  scientific,  less  permanent,  more  willing  to  scrap 
machinery.  Again,  our  shipyards  were  >„  few  that  most  of  our 
emphasis  upon  standardization  could  he  applied  to  new  yards 
in  which  it  made  no  ditference.  luigland  resisted  it  hitterly. 
partly  hecause  in  one  sense  she  had  no  standardization.'  and 
in  another  sense  she  had  a  good  ('eal.  I  say  she  hail  no  stand- 
ardization hecause  every  yard  was  a  law  unto  itself,  .md  the 
boast  of  the  common  British  shipyard  was  that  it  could  do  any- 
thing. 

•  A  Kood  illnstratioP  of  British  individualism  is  .iffordcd  by  FmrhlaK  April 
5.  1917.  nuotMiRMr  D  HMonson  of  WcM  ILirtlcpool  to  tlu^  itf.-ct  tin 
stan.Ly.l  machinery  adaptable  to  a  useful  rariRe  of  vessels  could  <|uiu-  w  I 
be  cons  ructe.1  but  tor  the  fact  that  Lloyd's  Register.  Hoard  of  Tr  ,|e  am 
Hntph  Corpor.ntion  RcKistry  issued  in<lepcndcnt  rules;  in  tlu-  makiiu-  ui  ,.ie 
single  en.Ie.l  l.oder  of  specified  dimensions,  the  three  authorities  .  .  ...eeifv 
three  diflerent  working  pressures."  I'liiiy 

For  example,  the  advertisements  in  one  of  the  leading  maritime  papers 
(/•a,r/./«v,  the  week  war  was  .leclared  showed  17  liritish  firms  advetl  me 
nr-fe.i?.!,'""'^,"'  shipbuilditnf  boiler  making  and  engine  mTkiuK  ,  aa 
r™r/"il  '^^  1"  *'"'""""'"'^''  \  appeared  to  be  exchisiveU  repairers 
1  seeme  '  I  i','  •7""""""^ '"  ''^  '"-"""I'v  engine  and  repair  works 
\hlTr^.    •  primarily  engine  htters  to  ships.  16  advertised  accessories  of 

the  more  important  character,  not  including  such  maUers  as  paint 


•J-*f 


IMr.lhN(l     (If     rilK    GREAT    WAR    1   I'llV    SIIII*riV(i 


While  F  >ay  thov  wtrc  utislandardizetl,  siine  ,,i  tlic  vanls  had, 
however,  adopted  tn  a  consiilcrahle  extent,  the  practice  of  stand- 
ardi/atioii  in  that  they  had  huilt  duplicate  «hips.'  for  even  on  the 
liuildiiii,'  of  so  lew  as  three  ships  i:.  per  cent  could  I)e  ■•ave<l  if 
they  were  all  alike.  Thirty  years  ago  one  Mnplish  lirni  made  W 
sailing  vessels  on  the  Clyde  after  the  satne  model,  .\notlier 
linglish  firm  had  the  hatiit  of  making  one  tspe  of  freight  ship 
on  speculatiim  and  sellintf  them  when  completed.  In  the  early 
I)art  of  the  war  '  several  of  tlie  leading  Kiiglish  steanishiji  com- 
paiiii*  organized  a  cotnpany  to  huild  a  new  shipyaril  near  Bristol, 
which  was  to  huild  ten  steamships  at  a  time.  They  planned 
to  turn  out  only  one  n'  'del,  an  «<,<>n(i  ton  freiRhter  to  replenish 
their  depleted  lieets.  In  the  main,  however,  Knglish  shipyards 
not  only  hoasted  of  their  wide  variety  of  capacities,  hut  every 
shi()ouner  had  his  own  notions  as  to  what  constituted  the  proper 
ship.  Ihe  shipyards  were  there  to  please  him.  It  was  claimed 
hy  many  that  the  supremacy  of  Uritain's  shipping  was  due  to  the 
great  variety  of  her  ships,  enabling  them  to  enter  every  port  and 
every  trade.  Omsequently,  when  the  British  Covernment 
establi-hed  its  Ministry  of  .Shipping  and  laid  down  a  stan.lard 
model,  opposition,  very  naturally,  expressed  itself,  particularly 
in  a  nation 'that  loves  to  grumhle. 

I-air/>lay,  the  partisan  champion  of  the  iiidi  'dual  shipowner, 
commented  editorially : 


The  principle  of  standardization  is  a  deadening,  soul 
destroying  thing.  It  crushes  individuality  of  design  in  pro- 
duction, just  as  it  kills  .ait  individuality  of  performance 
among  workmen.  Applied  to  design  it  is  exactly  the  same 
idea  as  the  traile  unions  would  apply  to  lalxjr  when  they 
insist  on  uniform  rates  of  wages — the  good  and  the  had 
workman  lo  be  paid  alike.  It  has  a  leveling  effect  which 
converts  individuals  into  cogs  in  the  industrial  machine.  So, 
if  there  is  to  be  progress  in  naval  architecture  after  the 
war,  standardization  must  be  absolutely  abolished  as  a 
compulsory  principle,  and  with  it  must  go  all  idea  ot  state 

'  Mariiu-  Hcviezf.  July.  i?16. 
'  IbiJ.,  September.  1916. 


jiiiiPBiiLDiNt;  orRiNr.  tiii:  war 


!1 


cuntrnl.  TluTc  can  nut  Iw  continued  state  cuntml  withe  iit 
cimtiniied  Htandanlization.  and  one  or  the  other,  or  lH)th, 
would  mean  titter  »ta(»iiation.  Su|)f)Ose  the  principles  of 
state  control  and  standardization  were  in  torce  when  lir. 
Kirk  was  evitlvin^;  the  triple-expansion  eiiKine  at  (Jovan, 
aiui  ai)pl\inK  his  new  ideas  to  actual  vessels. 

I'he  tliinjj  had  never  Iwen  done  Ijci'ore,  there  were  no  rules 
and  re^jtilations  app!yin}j  to  it,  it  was  out  with  the  standards, 
therefore  on  with  the  hreak.' 

And  again : 

It  is  useless  for  anyone  to  contend  that  standardized 
hoats  will  get  over  the  "  ISreach";  they  are  not  the  class 
of  hoats  that  the  trade  of  the  country  needs,  and  in  this 
contention  we  believe  that  we  have  all  owners,  and  certainly 
all  our  shipbuilders,  standing  firmly  behind  us.-' 

while  a  llritish  shipowner.  Walter  Runciman.  expressed  British 
di.'gruntled  individualism  as  follows: 

Put  an  end  to  the  fandango  moonshine  of  stamlardized 
ships,  which  nine-tenths  of  the  people  who  use  the  |)hra>c 
imagine  to  be  an  up-to-date,  progressive  invention,  where- 
as the  type  is  wholly  reactionary.  Duplicates  of  ordinary, 
up-to-date  cargo  vessels,  alike  in  every  particular,  couhl  be 
built  in  a  month  or  six  weeks  less  time;  perhaps  I  am  un- 
Icrstating  it.  ...  I  wonder  if  there  will  ever  be  made 
publicly  known  the  amount  of  tmie  that  has  been  wasted 
by  the  nuiltiplication  of  alterations,  made  in  a  variety  of 
ways  to  those  immortal  standardized  delusions,  and  how- 
many  vessels  of  rational  construction  coulil  have  been  put 
into  the  water  while  the  altering  and  rcaltering  has  been 
going  on.  The  thought  of  it  beshanies  one's  mechanical 
and  commercial  instincts.' 

The  official  point  of  view  toward  the  standardized  program 
is  well  stated  in  the  words  of 

Sir  L.   Money,   parliamentary   secretary   to  the   British 
Shipping  Controller,  replying  recently  to  a  question  as  to 

'  l-'airphy,  Septcmhtr  1.1,  1917,  p.  448. 

'  Ibid..  Kc-bruary  7.  1918. 

*  Claigow  Herald,  December  29.  1917.  p.  36. 


-22         INFMESCK    OF    THE    OBEAT    WAR    ITDV    sllllTrNO 

the  huililinjj  of  ^tandar.lizcil  ship<*:  "The  pn.Krani  of 
starulanlizcl  cnrgo  Hhipl.iiililinK  which  is  liein^  cnrrie.l 
•  mf  1^  tUMKiifil.  under  i\|)cri  a«lMic.  to  pHnhia-  Inr  the* 
nati.^nal  im-,  in  the  >ht>rte-t  |M>!«»ilile  -pace  of  time  in  the 
jjiven  circimistaiice).,  vessels  >|H'iiall>  designed  to  meet  the 
enmhti-.M'*  of  war,  and  it  i«.  nut  the  ea^e  that  then-  >tantlar.| 
>hips  have  k-en  sni.stituteil  i.ir  ve^-els  whieh  are  ei|nally 
!*iiital)Ie,  The  'landard  pr. i^;ratn  i>  not  one  'if  (hM.fjjani/a- 
tion:  on  the  cnntrary,  it  i-  a  tuitluid  of  c.rKanization  which 
econonnzes  time,  material  and  lalxir,"  ' 

fn  Retting  up  its  -^tan.Iar.l  ik-ii^u,  the  IJriti-h  (iovernmcnt 
a.sked  various  shiplniilder,  \\\m>  had  heen  huildin^,'  more  or  h-^s 
standard  ships,  to  send  in  various  desij;ns  siinplitied  as  much 
as  pos>i!)le.  One  of  the^e.  with  some  simplitications,  wa* 
accepted  as  a  standanl,  liut  there  was  nothing;  revnhitionary 
ahout  ,1  't  was  merely  made  as  simple  as  [hivsihle.  l-'or  ex- 
amp!..  ,lfck  of  an  ordinary  steamer  curves  from  end  to 
etui.  K'viiif,'  bow  and  stern  s.inie  ri^e,  hut  for  i:.  years  the  Holt 
Line  vessels  have  Iteen  Hat.  For  a  lon^  time  American  vessel* 
have  heen  (latter  than  Uritish.  so  the  adoptit«n  of  a  ship  with 
almost  tlat  deck  was  not  a  revolutionary  move,  hut  it  is  easier 
to  make. 

Xe.irly  straight  .sides  was  another  simplification.  It  used  to 
he  that  the  girders  ilown  the  side  had  to  he  put  in  the  furnace 
and  heated  at  the  yards  to  he  given  the  e.xact  curve  at  the  bilge. 
Now  the  bilge  in  the  standardi/t-d  ship  is  made  at  almost  right 
angles,  so  tne  straight  side  pieces  like  barn  timbers  can  In;  used 
and  no  heating  at  the  yard  i.s  rcpiired.  The  nice  curves  of  the  old 
deck  house  are  gone.  It  is  simply  a  plain  rectangular  box.  The 
standardi/ed  ship  is  a  ship  down  u>  its  lowest  terms,  and  then 
duplicated. 

The  individuali.sm  and  nnich  of  the  beauty  of  the  old  ship 
are  gone.  One  hundred  years  ago  the  >hip  was  a  w(jrk  of  art. 
Every  man  on  it  regarded  himself  as  something  of  an  artist. 
The  carpenters  on  the  outside  of  tiie  ship  each  had  certain  space 

'  Matinc  Hi-view,  July,   lyl7.  p.  -'49. 


."MIPBt  ILDIMC    niklNO    Tllr.    VVAK 


22:j 


to  work  ill  tit  initiifiK  i.n  pinnk*.  Fhey  Mf.>vf  for  the  most  dif- 
iivitli  work.  It  wa-.  caMcr  t...!.,  ,t  ,,n  the  tli.itcr  |»art»  „i  the  -.i-lc-* 
jin(l  v<r\  .hrticult  at  ih*  txirnm-  U.w,  There  wa»  a  sense  of 
iivalrv  provailiiiK  aiiiunj-  tlu-  iar|)rnters  tor  the  privilej;*.  -.f 
.Iniii^'  the  Ih.w.  \>  thc\  lach  worked  uii  ,catTol<hiij{  hutiK  over 
the  c<lKe  of  the  ship,  oik  .if  their  deliRhts  was  to  leave  a  man 
who  coiil.l  not  keep  up  hanKinj:  in  the  air  a-  they  worked  up  or 
doun  the  sh!p\  si.le,.  All  thu  individualism  has  j;otie.  All 
llii<*  iHrautv  has  n-'iie.  It  i.  ^mply  a  uniform.  m.Mli(ied  siand- 
ardi/id  approach  t>.  a  Ih)x  made  a^  nearly  as  p<jssit.Ie  in  straight 
lines.  Imt  a  iliea|KT.  m..rc  ifVu-ient  carrier. 

The  first  British  vessel  Iniilt  under  stan<lard  s|«cifications  had 
the  keel  laid  I'ebruary,   l!U7.  was  ready  to  sail  on  the  2Sth  of 
.\uKU>t  and  in  every   wa\    passed   satisf.utory  tests.'      fn   tiie 
fnited   States  tioverntPent's   shiplniil.linn  proj;ram   the   stand- 
ardized ship  was  accepted  without  anv  serious  delate.     We  had 
the   e.xample  ot    l-.n^laturs   ;uloptioii'.       Ihe   war   was    further 
advat.ce.!  and  the  imperative  necessity  for  ships  was  manifest, 
rhen.  too.  the  American  manufacturer  had  long  t)een  practising 
the  policy  of  utilizing  stan.Iardization  and  interchangeable  parts 
—methods  of  manufacture  which  ha.l  given  us  mechanical  su- 
premacy in  the  reaper,  bicycle,  typewriter  and  aufomohile.  witli 
the  world  renowncl  example  of  the  Fonl  car  in  everv  man's 
mind  and  the  dollar  watch  in  every  man's  pocket.     All  students 
of  machine  slu.p  practice  were  familiar  with  the  chief  advantages 
of  standardization,  namely,  the  intluencc  of  repetition  to  reduce 
cost. 


Thr  Inthwncc  of  Standardhation  on  Cost. 

The  expert  machinist,  the  old  stvle  machinist,  can  take 
any  kind  of  a  machine  and  do  anv  kind  of  work,  but  he  is 
now  as  much  out  of  date  as  the  man  who  can  make  a  watch 
or  a  wagon  fnjm  start  to  fini.sh. 

It  is  wasteful  for  one  man  or  one  machine  to  do  many 
kinds  of  work.  The  reason  of  this  is  that  the  machines  are 
elalx)rate:  tney  must  be  adjusted  and  set  for  each  kind  of 

*  U.  S.  Cummcnc  Retorts,  Octolxr  JJ,  I'Ji;,  ;,.  jjj. 


•  tjwrati.in  ihai  tlnry  iwff.irm  HuI'  the  Mtiinj;  i,(  .1  m.,. 
iliitii-  |.i  tin  .1  pirct-  ..(  wiirk  uitcii  take-  nmn-  imu-  than  the 
actual  il.iinj;  .,|  the  wi.rk.  S>njrtinM'  it  lake*  a  hall  .lav  t-. 
rr.rt  the  itiachme  Sometinte^  it  take*  a  wetk.  It  may 
lake  Irii  miniitei  to  «.irk  up  '.m'  piece  alter  the  nia- 
chiiu-  i*  wt.      IhuH  the  in,t,  ,,i  ^hapiiti;  .1  partiiiilar  pu.e 

•  'I  uutal  in  a  machitic  -hnp  were,  tor  ..ite  piece,  jr,  rent*, 
/.ir  twu  piece'*  l">  ceiili  each.  t..r  tiw  pieces  |))  cent"  each! 
tur  inti  piece-  .'.  centi  each.  i<>r  ..00  piece*  :t  cents  each, 
N'l.vv  we  nee  why  it  i*  »..  nuich  cheajK-r  to  make  the  valve* 
fi)r  every  nne  ni  a  htint're.i  .hip  rn>;ine-*  all  alike,  new  *fvle, 
than  It  {•.  fn  make  ..ne  ••r  tw..  tnr  -single  or  ii*tcr  *hin*  olil 
iHlc  '   ' 

Then,  to  cap  the  clima.x  of  this  thinu.  thc«e  piecr*  made 
at  Mich  \n\\  cn»t  are  inicrv  latiKcahle.  and  will  (it  mto  any 
"lie  oi  ten*  ut  ihnii*aiul*  .it  machine*  of  a  certain 
type  It  ii  hv  the  ntiii/aii.in  of  the*e  revolufii)narv  j  r,,c- 
e**e*.  slamlardization  and  «pecialization,  that  the  K..rd 
car,  the  dull.ir  watch,  and  ilic  .\merican  It h.- .motive,  nia<le 
'-y  highly  paid  nun.  arc  >n],\  m  oimiK-titioii  with  the  pr.wl. 
iK«'  ot  men  who  work  tor  lower  wage*  hut  on  the  „lc| 
un>tan<lardized  methods. 


The  adoption  of  standardization  gave  the  shipluiihlinR  tn- 
<lu.*li-v  acccsi  to  the  machine  -hops  ot  the  wImIc  nation  rather 
than  making'  them  dcpcmlcnt  upon  work-  immediately  l>e>ide 
the  river  hank.  By  a<>emlilini;  parts  made  to  fit.  the  first  I.ilwrty 
motor  dc-i«ned  for  aeroplanes  wa-*  made  in  twelve  lactorie* 
scattered  lietween  Connecticut  an<l  C-iifoniia,  Ship  de-iij;'  ha* 
fi  r  Sonic  time  Iwcn  at  the  point  where  ilic  ves-,er*  entire  frame. 
f1ot)rs  and  plates,  can  U-  cut  m  tenuths  sufficiently  -ihort  to  !« 
.ship|>ed  on  freight  cars  to  any  point  where  it  is  desirable  to 
a.sseml.le  them  int.i  a  complete  -liip,  This  permits  :my  steel  mill 
to  make  plate-,  angles,  -hapc-  of  standard  dimensions,  with 
hole-  i)iuichcd  1  >t  I  Hi  ,,f  an  inch  -cant  allowing  for  ream- 
ing after  the  pla^  are  in  place,  all  reaming,  riveting  and  caulk- 
ing being  dtjiie  by  engine  power  through  the  aid  of  pneumatic 
tools.  Thus  standardization  of  design  leads  t)  distant  tiiann- 
facturc  of  parts,  like  knock-down  louses,  and  the  putting  of 
these  parts  together  wherever  ii  is  most  -uitable.    Thus  we  have 


"iiiPBi  iLi>i.\<;  rnm.vci  the  w,\ii 


'2i:> 


the  «ii.callp«l  "  fabricalrti  "  ^hip.  Thin  i«  a  lrrm«n<l>»iM  c-  mra^t 
I.,  praciii-r-.  prfvailiriK  "»  "i"««  ^hipyanl*  whcrrhy  each  platr. 
angle.  an<l  ^hapt  i<i  a  law  unto  ituiU  in  iltmenjion,  form.  lutinK, 
anil  the  miml*r  <<{  fa»tcnirtif»  rci|uirc*|  tu  sriurr  ii  in  pl.icc,  vi 
thai  ihr  -hip  i«  huilt  a»  a  h>HHC  u  built,  by  piccr^  made  l'»  Jit  <<n 
the  »|K)l.  ^xherea*  the  fabricatcil  »hip  oi  the  war  en»erj»eiicy 
^hipvaril  i^  I..  Ik  put  i.ijjether  like  a  kni<k-«l<mn  house  ur  the 
pari»  i)f  a  ■>tii!  «k\scra|)er  ' 

Mr.  Geo  j   Halilwin,  prciiflcnt  »i  the  New  Yurk  ShipbuihIinK 
Co.,  put*  it  thus: 

When  we  first  start'  '  in  on  thi»  program  of  *o  many 
«hip«  a  vfar  we  bumpe  .  nto  a  <tumblinK  block.  Many 
of  the  ikilleil  machmio.  iron  wnrkeri  did  not  ktmvv 

a  fhin^:  al»out  huildinK  "f^'p"*  Mumlrrd*  ot'  ^trucinral  iron 
'li' p--  had  plenty  of  steel.  Init  could  not  furnish  the  fancv 
i\\i'»tcd  >haf)C«  that  had  always  l»een  ret|uired  f«)r  the  build- 
ni|;  of  .ihipi 

What  <lid  we  do?  Why.  our  engineers  and  ile>>iKner« 
simply  «nt  toRethtr  and  dc-iKned  a  Ixiat  that  couhl  \k 
made  with  the  use  of  -.traight  Iwanii.  such  a*  can  l»c  turned 
out  in  any  shop  where  bridge  or  .structural  iron  work  is 
tun.id  out. 

\\c  cut  out  all  curveil  sidex,  all  camlwr  decks,  and  we 
arc  building  ll.u  Ixntom  ships.  In  this  way  we  are  obviating 
all  *hc  troubles  that  used  to  enter  into  the  building  of  a 
steanishif). 

In  days  gone  by,  and  right  up  t"  a  few  months  ago.  it 
was  thought  that  no  Intat  could  possibly  get  alon^  .1- 
less  it  had  a  camlwr  deck.  This  means  that  the  deck 
bulgtd  up  a  little  to  let  the  water  run  otT  <luring  hcavv 
weather. 

Wc  figured  that  water  will  run  oflf  a  tlat  surface  almost 
as  <|uick  as  it  will  any  other  kind,  and  ^o  we  decided  to 
have  all  our  decks  built  flat.  We  have  found  that  this  is 
just  as  gfKxI.  and  even  lietter.  than  the  old  way,  and  that 
it  d<r-i  not  require  any  special  rolling  machinery  to  make  the 
beams." 

'Sic    I  U'p.-irtment  nf   Ci)mmercf.  Slandardisalian   in  the  Construe,    n  of 
I  rt'ighi  Ships.  K    1*.  Strattoii,  1916. 
'  Phi!adt'lflihi  Inqiiiur.  May   li,  1918. 


2-2e, 


IM-Mi:\(-i:    OF    TIIK    CRKAT    WAR    ipn\    SIIII'PINO 


"  Ifs  like  launching  a  s„ap  N.x."  remarked  a  shipyard  worker 
at  a  recent  lamichinj,'  cm  the  Delaware. 

Ihe  United  States  C.overnnient  accordinRlv  Iniilt  three  \ards 
nne  at   llof;  Island,  helnw   F>hiladelphia.  one  at  nristol    above 
i;hda<lelphia.  and   .me  at   Xewark.   New  Jerscv.     The  one  at 
.Newark  plans  to  l.uild  :.o  ships  at  once,  all  exactly  alike    and 
I'ctore  the  first  keel  was  laid  f..rt>-nine  steel  plants'in  ditterent 
rarts  ot  the  country  were  at  work  makin-  steel  for  these  ships  ' 
Ihus    thousands   of    men    (and    women)    who   neyer   saw   the 
SI...  wno  never  saw  a  ship,  are  at  work  helpinj^  to  Iniild  ships 
Ihe  Westmghouse  Company  has  huilt  a  ship  machinery   fac- 
tory with  .•!;■.  acres  of  tloor  space  and   110  acres  reserved  for 
hmldmps  near  Chester.   Pa.,    for  the  supply  of  Eastern   shin- 
yards.  ' 

The  first  stage  in  the  wr-rk  of  the  famous  Hog  Island  plant 
at  Fhdadelphia  was  the  building  at  the  nearby  plant  of  the  Veu- 
\  ork  Shipbuilding  Co.  across  the  river  of  a  steamer  complete 
m  every  respect,  after  which  this  model  ship  was  taken  to  pieces 
each  ot  the  2(..()0()  pieces  blueprinted  or  reduced  to  exact  meas- 
urements so  that  they  might  be  tluplicated  with  a  degree  of  ex- 
pertness  and  exactness  heretofore  unknown.  These  20  OOO  pieces 
were  then  let  out  to  contractors  all  over  the  Unite.l  States  for 
manufacture,  to  be  assembled  at  the  Hog  Island  plant  It  is 
claimed  that  careful  planning  of  the  routing  of  material  and 
equipment  about  the  plant  saves  -r,  per  cent  of  the  construction 
cost. 

This    fabricating    system    undoubtedly    throws    more    strain 

mmmMmmm 

tliati  we  arc  now  trying  l"rtunatcly  we  can  try  much  harder 


SHIPBUILDING   DURING    THE    WAR 


227 


upon  the  railroads  of  the  country  because  of  the  thousands  of 
carloads  of  parts  and  the  tens  of  thousands  of  shipments  of 
pieces,  every  one  of  which  must  be  in  hand  and  in  place  before 
the  ship  can  sail. 


Standardization  in  Wooden  Ships. 

The  attempt  to  apply  standard  design  to  wooden  ships  has 
proved  less  of  a  success  at  the  hands  of  the  United  States  Ship- 
ping Board.  The  fault  is  not  with  the  principle  of  standardiza- 
tion, which,  however,  is  far  less  eflfective  in  wood  than  in  steel 
construction.  It  seems  that  the  shipyards  oi  Maine  were  accus- 
tomed to  building  a  certain  kind  of  ship  for  which  their  timbers 
of  hmited  size  and  shape  were  admirablv  suited.  These  vessels 
did  not  exceed  2.400  tons  in  capacity.  The  builders  of  the  Pacific 
Coast,  with  the  giant  trees  of  that  region,  could  get  timbers  of 
almost  any  size  they  wished,  and  could  build  larger  vessels 
The  builders  on  the  Gulf  Coast  had  lumber  of  intermediate  size 
and  built  a  still  different  type  of  ship  from  either  the  Pacific  or 
Atlantic. 

On  going  into  the  Shipping  Board.  General  Goethals  said  he 
did  nut  know  anything  about  ships,  but  he  finallv  adopted  the 
Ferris  design  of  wooden  ship,  which  it  is  claimed  was  merely 
a  copy  ot  a  steel  ship,  and  gave  little  regard  to  the  material  from 
which  It  was  built.     As  a  result  it  was  e.xceedinglv  difficult  to 
construct  and  required  timbers  of  great  size.     Despite  this  fact 
(General  Goethals.  and  his  successors  on  the  Emergencv  Fleet 
Corporation,  adhered  rigidly  to  this  design  as  the  one  and  only 
one  they  wanted  to  build,  with  the  result  that  the  Maine  ship- 
builders could  not  construct  it.  and  the  (iulf  .shipbuilders  could 
only  complete  it  after  importing  train  loads  of  special  timbers 
trom  the  I'acific  Coast  at  great  cost.    In  the  meantime  the  South- 
ern lumber  manufacturers  had  lost  much  monev  in  searchin-r 
their  torests  through  and  through  for  the  rare  trees  that  mi^lu 
iill  this  peculiar  lumber  bill  which  they  had  contracted  to  fill 

There  is  little  doubt  that   standardizatir      here  was  carried 
too  far.     The  x\ew  l-nglanders  could  have  duplicated  their  best 


22S  IXFU-ENCE    OF    TMI-    GREAT    WA«    l|.„N    SMIPPIXG 

schooner  on  one  stan.lard  Xew  [Cnfilan.l  .lesign  not  exceeding 
-.»-',.  nns  capacy.  The  (iulf  huilders  could  have  ha<l  one 
somewhat  s.nnlar  vessel,  whereas  the  I'acific  Coast  coidd  have 

made  one  al«.ve  :.. ,  tons  with  ease.     As  it  is.  there  have  been 

Hlle  wooden  sh.pwavs  in  the   fnite.l  States  ,h,ri„.  the  whole 
period  of  the  Shippin,^  Dnard's  career,  namelv   lanuarv.   li.lT 
o  -May.  l.UM.  and  during  part  of  that  time  men  have  begKed 
in  vani  for  the  privilege  of  buil(hng  ships. 

(r)  The"  Unsinkablc"  Ship 
The  unsinkahle  ship  has  long  l.cen  the  dream  of  man.  The 
TUamc  and  the  l.usit.nia  with  their  water-tight  compartments 
were  suppose<l  to  have  been  such  ships,  l.ut  the  ice  and  the  tor- 
I.edoes  proved  otherwise.  Their  compartnients  were  too  big 
and  there  .s  alw-vs  the  possibility  of  torpedoes  hitting  on  the 
hne  ot  division  between  two  and  flooding  both 

There  are  ships,  however,  now  sailing  the  seas  that  have  been 
torped..e.l  and  h.ue  floa.e.l  on  because  the  compartments  were 
not  too  arge  and  the  divisions  went  clear  up  to  the  ,leck  far  al^ve 
.he  water  line.  Mr.  J.  X\-.  I.sherwood.  British  ship  designer 
some  ot  who.se  plans  have  been  so  e.xtensivelv  followed,  has  de- 
s^ned  an  onlmary  shelter  deck  vessel  which'British  shipowners 
think  IS  a  close  approach  to  the  unsinkahle  ship,  because  she  is 
sulKlnule,!  to  the  extent  that  she  could  have  four  of  her  com- 
partn,ents  open  to  the  sea  and  yet  float.  The  particular  advan- 
age  o  this  design  is  that  while  the  ves.sel  would  ordinarilv  carrv 
•.<"»<•  ton.s  on  ...  ,eet  .Iraft.  she  becomes  unsinkahle  with  a  re- 
duction ot  but  :.;;  per  cent  in  her  carr>ing  capacitv.  namelv.  to 
^.■>.J0  tons  on  a  draft  of  -i:,  feet,  (i  inches  ■ 

Another  English  ship  designer  has  aimed  to  add  securitv  by 
combining  many  compartments  with  the  placing  of  the  machin- 
crx  far  att.  This  presents  a  target  only  half  as  long  as  the  ordi- 
nary construction  which  puts  machinery  in  the  .niddle  of  the  ship 
w>th  long  sha.t  back  to  the  propeller.     An   Italian  designer 

'  Fairplay,  September  JO,  1917.  p.  489. 


SniPBlMLDIXG    Dl-RING    THE    WAR 


2211 


V 

4 


PiiKlicsc  acl.is  further  security  by  placing  three  sep.irate  skins  or 
bulkheads  around  the  engine  anil  coal  space. 

Karly  in  the  war  the  IIuKlish  experimented  on  some  Channel 
Iwats  by  tiliinj,r  them  with  empty  casks,  uhich.  when  pressed  bv 
the  nsin^r  water,  burst  thn.uph  the  <leck.     The  United  States 
Sh.pp.nff  Hoard  experimenter!  with  the  Austrian  steamship  Lucia 
by  fasten.nfr  to  the  inside  of  her  hull   ]2.0()(»  wooden  Iwxes 
each  covcrc.!  with  thin  galvanized  sheets  of  steel.     This  unfor- 
tunately to,jk  about  ].-.  to  J.)  per  cent  of  her  freight  space,  and 
while  .t  was  well  agreed  that  vessels  by  this  means  could  be 
made  to  float,  it  woul.l  not  at  all  prevent  a  torpedo  from  wreck- 
ing her  to  the  extent  of  making  her  worthless,  so  that  .she  might 
float  about  like  a  wrecked  lumber  schooner,  a  factor    however 
ot  great  value  for  a  troop  transport.     Suggestions  ilmost  in- 
nmnerable  have  been  made  to  the  Shipping   Hoard,  manv  of 
which  have  been  tried  out.  and  most,  of  course,  refused'  but 
they  are  building  several  vessels  whose  plans  for  a  high  degree 
of  unsmkability  have  been  approved  by  naval  experts. 

New  Methods  of  Construction 
The  discovery  that  large  pieces  of  metal  could  be  fastened 
together  by  welding  w'th  the  electric  arc  rather  than  bv  rivets 
.s  a  process  which  came  in  time  to  I,e  of  great  value,  but  prob- 
ably came  too  late  to  give  us  sufficient  time  to  work  out  the 
technique  necessary  to  use  it  in  building  the  hull  of  a  ship  more 

'ether""''"''  ''''''"  ''■'  '^^  ''''''^'"  "''"'°'^  °^  "''"'""^  P'^*"'  *°- 
It  has  rendered  us  great  service  in  that  it  enabled  us  to  easilv 
defeat  the  plan  of  Germany  to  wreck  the  German  steamers  in 
American  ports  so  we  could  not  repair  them  for  manv  months 
Ihis  plan  was  to  break  parts  of  the  machinerv.  .selectiiur  such 
parts  as  would  require  almost  complete  tearing  out  and  "recon- 
struction to  repair.  But  the  new  invention  permitted  us  to  weld 
them  in  place  and  in  a  surprisingly  short  time  the  ships  were 
loa(le<l  with  American  tr.^ops  cro-ing  the  Atlantic.  The  last 
ot  these  vessels  was  in  order  by  Januarv.  1918. 


•230 


INFI.IKNCK    OF    THE    GRF.AT    WAR    TPON    SIMI'I'INr, 


If  wcUlinp  used  the  ordinary  rolling  mill  plates,  it  would  be  of 
advanta^'c  only  if  it  worked  faster  or  easier  than  rivetinjj.  l)e- 
cau^e  at  the  present  time  the  capacity  of  roUinj;  mills  of  the 
country  promises  to  he  ahsorhed  hy  the  rivetinj;  method.  There 
have  already  been  found  many  places  in  inside  work  where  the 
welding  method  is  more  efficient  than  the  old  way  and  it  is  being 
used. 

New  Materials 

(a)  Wooden  Ships 

The  rush  to  get  ships  of  any  sort  has  caused  a  temporary 
levival  of  the  wooden  shipbuilding  industry  of  tie  United  States. 
Incidentally  it  also  cost  us  more  in  that  it  was  partly  the  innocent 
cause  of  the  paraly^ring  controversy  between  Messrs.  Denman 
and  Goethals  as  to  what  kind  of  ships  we  should  build.  The 
woollen  >hip,  however,  has  come  to  stay  during  the  present 
period  of  ship  famine  because  it  represents  an  added  material 
and  an  added  source  (,'f  supply,  using  a  class  of  labor,  namely, 
carpenters,  unaciiuainted  with  metals  and  untitled  for  building 
iron  ships,  and  a  mat  trial  whose  production  in  nowise  interferes 
with  the  maximum  production  of  steel.  Wooden  shipyards  have 
been  revived  from  picturesque  ruin  and  are  now  busy  on  every 
one  of  our  coasts. 


(b)    The  Composite  Ship 

In  the  early  months  of  the  shipping  famine  we  let  a  number 
of  contracts  for  what  were  called  composite  ships :  namely,  ves- 
sels with  steel  frames  and  wooden  sheathing.  These,  however, 
appeared  to  be  of  (juestionable  merit,  and  have  now  been  aban- 
tloned  because  they  cost  almost  as  much  ?s  steel  without  many 
of  its  advantages. 

(f)    The  Cement  Ship 

Here  is  a  great  hnp<.\  certainly  the  greatest  hope  of  any  of 
the  new  thinir^  that  lie  outride  the  old  established  w\jou  and  steel 


SIIIPBrri-DING    DURING    TJIE    WAR  231 

ship.    While  the  fabricated  stnrulardized  steel  ship  will  i.ndouM- 
viUy.  when  -mcc  <.i,r  plants  ;;ct  to  Roinp.  I,e  built  more  rapidlv 
than  ships  were  ever  built  l«forc.  the  cement  sh,p  mav  outstrip 
the  tabncators.     It  seems  almost  Um  jjood  to  Ik-  true      If  we 
only  had  known  in  April.   11.17.  what  we  can  er-sily  know  in 
.^pnl.  1 !.!'(».  we  might  have  had  many  more  ships  afloat  by  this 
time.     There  is  no  reason  why  we  should  not  ha%e  known  in 
1!>1.  as  well  as  we  will  know  it  m  1020.  no  reason  except  the 
limitations  of  the  human  mind.     The  experience  with  the  con- 
crete ship  can  be  taken  as  reasonable  proof  that  man  after  all 
IS  an  essentially  stupid  and  ineffective  rather  than  an  essentiallv 
intelligent  animal.     Cement  has  been  known  so  long  and  the 
history  of  cement  as  a  shipbuilding  material  is  so  old  that  it  is 
almost  unbelievable  that  we  should  have  known  .so  little  about 
It  when  the  war  began.     Particularly  puzzling  is  the  case  of 
England,  a  nation  whose  life  absolutelv  depended  upon  ships 
und  a  nation  that  has  known  for  twenty  years  that  the  submarine 
was    more    than    a    dream.      Germany.    Holland.    France    and 
America  all  knew  more  about  the  cement  ship  than  did  England 
In  .act.  she  never  built  one  for  years  after  other  nations  were 
expermienting  with  them.     Her  ignorance  in  this  direction  can 
only  be  un<lerstood  when  one  remembers  that  the  students  at 
the  universities  that  crown  her  educational  svstem  and  dominate 
her  intellectual  life  have  during  this  same  period  devoted  them- 
selves so  exclusively  to  the  classics  that  they  have  called  science 
the  stinks"  because  of  the  well  known  odor  of  a  chemical 
laborator>-.     This  name  for  science  in  English  universities  will 
not  survive  the  war. 


History  of  Concrete  as  Ship  Material. 

Although  the  greatest  development  has  taken  place  within  the 
past  year,  a  concrete  rowboat  was  built  and  patented  by  M  I  am- 
bot  .It  Carces.  France,  as  early  as  1S40.  The  following  year  the 
invention  was  investigated  „,  the  French  Government,  but  the 
development  was  left  to  private  initiative.  The  boat  was  ex- 
hibited at  the  Paris  exposition  held  in  1855. 


2:J2 


INFLl'ENCK   UK    THE    GREAT    WAR    I   I'o.V    .MiUM.NG 


As  late  as  litO.J  this  same  rnwboat  was  still  in  first  class  con- 
dition. \ot  only  is  this  the  first  instance  en  record  of  the  use 
ol  concrete  in  the  iiniidinj;  of  boats,  but  it  is  also  the  first  cx- 
.•ini|)ie  of  the  use  of  reinforced  concrete. 

in  Ix>7  iiarj^es  of  from  II  to  ;.:.  tons  capacity  were  Iniiit  for 
use  on  the  inland  waters  of  Holland,  and  one  descrilK-d  as 
a  s!oo[)  named  dc  Zccmcuv  has  been  constantlx  in  ser\ice  since 
1^x7  an.l  i>  reported  to  W  in  j,'ood  condition  although  she  "  has 
leen  employed  in  the  winter  months  among  ice."  ' 

In  l"*!"?  a  concrete  pontoon  f.T  feet  in  length  was  Iniilt  in 
Ital.\   for  Use  (.11  inland  waters. 

A  vessel  of  schooner  rip  '-.'<  feet  in  length  was  built  in 
America  m  iMtL'.  and  is  reported  to  have  worked  in  the 
coastmj;  trade  for  some  years  and  to  have  nwle  voyages 
as  far  north  as  Hudson's  I5ay  and  as  far  south  as  Cape 
Hatteras.  On  one  occasion  she  struck  a  rock  ofiF  Cape 
Charles,  but  was  undamaged.  In  the  owners'  opinion  a 
steel  vessel  under  the  same  circumstances  would  have  been 
lost.' 

In  IKO:.  concrete  barges  of  l.'O  tons  capacity  were  built  by 
Carlo  Cabellini  in  Italy.  In  I'.MXi  a  barge,  constructed  by  him  for 
the  use  of  the  Italian  Navy  in  the  military  harl)or  at  Spezzia. 
was  tested  before  acceptance  by  being  driven  against  some  pilings 
and  afterwards  rammed  by  a  steel  tow-boat.  The  results  of  these 
tests  uere  so  favorable  that  the  construction  of  similar  bar»?es 
f(jllowe(l.  Signor  Cabellini's  system  of  construction  was  sub- 
se(|uently  adopted  in  other  countries. 

In  I'.Milt  a  I'L'o  ton  freighter  was  built  in  Germany  for  river 
traffic  and  in  ll»li'  a  concrete  .saill)oat  was  built  in  the  same 
country.  In  the  construction  of  this  boat,  great  care  was  taken 
to  make  its  lines  conform  with  the  approved  sailboat  designs. 
For  obvious  reasons  the  present  condition  of  this  boat  can  not 
be  determined. 


'  Clns^nt^'   Hcald,   Dtcciiil.cr  2'.),   l<'17.'p.   .15. 


SiriPnilLDI.SG    Dl'RING    THE    WAR 

In  Great  Hritain  the  first  ferrn-concrete  vessel-n  l.arce 


M.I 


ill- 


In  1..14  a  cncrete  motor  boat  was  built  I.v  Walter  Dnrsov 
of  r.„  R.ver.  AI.ch.«an.  Dorsey  explains  the  hnildin,.  of  his 
boat  n  sav-n«  that  he  ha.l  no  wood  or  steel.  I-'or  a  keel  he  n-.l 
a    l-,ar  I,ent  upward  at  the  ends.     Twelvc-RauRe  by   l   i„ch 

S    el  :!     "^  "T  "•"'  '"'  "'^  '''''''  ''  '-  '"-  ''"-vals. 

hed         "'\'"^"^-^'^;     '^   '/^  inch  .square  wire  JsU  was 
a  tached  to  the  framework.     The  cement  was  applied  to  this 

amcu.,rk  1,  means  of  a  trowel.   The  In.at  when  complet  d   v 
IS  feen.  .nches  u,  length  with  a  4  feet  n  inch  beam,  •'i  inch  T'l 
and  a  hull  .'JS  mches  in  depth.   Motive  power  was  furnisCd  1  v  " 
s,x,or.sc-power  gasoline  motor.  Dorsey  named  his  boat  clU 
Dorsey  s  lK,at  has  now  been  taken  over  by  the  Unite.l  Stat^ 

^::Tm^:. "  r^  '^ ""'"''  ^^^"-  ''^''-^  '^• 

ri  Lo  *  experience  of  this  boat  with  the  jar- 

r.ng  of  a  gasobne  motor  is  very  suggestive  of  success  on  a 
rnooted  quest,on-the  influence  of   the  engines  in  a  c^ncret^ 

During  ion  and  mn  many  scows  and  barges  were  built  of 
concrete  m  the  Unite.1  States  for  use  o„  the  lakes.     Get 

Tsman        f  "'  T  '?«''  '''''  ""*'^  ♦■-  "-  -  '-^ii"!^    «4 
or  sma  1  craft  m  the  Panama  Canal  because  of  the  scarcity  of 

tee  and  ,.ood  su.table  for  such  construction.    For  the  last    o." 

L.ie.sapeake  Bay  to  convey  coal  and  water  to  the  dredges  and 
to  carry  sand  and  gr.ucl.  urctiges  and 

eve?in  mT'  j'evelopment  of  the  concrete  boat  occurred,  how- 
ever m  1J1<      In  the  Scandinavian  countries.  Norway  and  Den 
mark  ,n   particular.  ,..o  to  200  ton  lighters  were  consIructLuor' 
ruer  and  coastwise  traffic.     Official  rules  have  !)een  lai      own 
.n  Denmark  for  construction  of  ferro-concrcte  boat".     ll,  E,;" 

'Glasgo-u.'  Herald.  DtctmhcT  29,  1917,  p.  35 


-2M 


INFI.IF.NCK   f)l      nil.    C.HKAT    U  \R    IPON    SHIPriNO 


land  a  .'ioo  ton  concrete  nrntor  ship  was  luult  for  coastwise  am! 
cliannel  traffic.  To  Norway  lM;l(inf;s  the  credit  for  tlie  srcatest 
(levclnpnicnt  of  the  ii^e  of  concrete  shiphiiildiiiK  Tlie  leading 
company  of  that  country,  the  Fougncr  Steel  (  oncrete  Shi|i- 
liuililing  Company  of  Moss,  Norway,  is  now  enga^jcd  in  the 
IniildiiiK  of  200  to  .'$,000  ton  vessels  for  the  traffic  Iwtwcen  Nor- 
way and  Rngland.  .\  vessel  of  »,00(t  tons  was  reported  on  the 
ways  of  this  company  in  NovemlK-r,  I'.'IT.  The  same  company 
also  lias  under  construction  a  large  tug-boat  and  a  reinforced 
concrete  lightship  for  the  .Norwegian  (iovernment.  This  light- 
ship is  to  he  stationed  in  the  stormy  sweep  of  the  Skager-Kak. 
The  first  ship  turned  out  hy  the  company  to  be  given  any  ex- 
tended trial  was  the  S'linisrnfjord  a  vessel  of  400  tons  com- 
))leted  late  in  I'.MT.  In  January,  I'.'ls,  this  vessel  completed  a 
round  voyage  between  Norway  and  the  IJritish  Isles,  steaming 
2,000  miles.  It  answered  every  test  satisfactorily,  and  has  lieen 
given  a  class  .\-l  rating  by  Lloyd's.  The  Norwegian  Veritas 
has  ])lace<l  the  vessel  in  first  class  (experimental). 

Mr.  N.  Fougner  of  the  Fougner  Steel  Concrete  Shipbuilding 
Company,  of  Moss,  Norway,  on  a  recent  trip  to  the  United 
States  organized  the  1  ^ugner  American  Steel  Concrete  Ship- 
building Company  of  New  York. 

In  Spain  at  the  present  time,  considerable  attention  is  I)eing 
given  to  the  building  of  vessels  of  reinforced  concrete.  The 
Works  &  Pavements  Corporation  of  IJarcelona  has  in  course  of 
construction  its  first  cargo  lM)at.  The  firm  plans  to  construct  in 
1!»1^  a  gross  tonnage  of  M'.ooo  tons  which  corresponds  to  a  dis- 
placement of  70,000  tons  consisting  of  standard  types  of  ships 
of  .'iOO.  .".00,  and  l.ouo  tons  each.  In  Germany  concrete  is  be- 
ing recognized  as  the  shipbuilding  material  of  the  future  as  shown 
by  the  following  (jucnation  from  I'airplay  for  January  10,  I'.ilS: 


l-'crro-i.oncrete  is  evidently  coming  in  all  right  as  a  ship- 
building material.  Captain  Persius.  the  naval  expert  of  the 
Berliner  Taijeblatt.  says  that,  owing  to  the  prospective  short- 
age of  iron,  steel,  and  timber  for  shipbuilding,  after  the  war 
the  leading  (ierinan  and  Austrian  firms  are  preparing  to 


siiifiii'ii  DtN*:  niRiNT;  tiik  \v,\r 


2.')5 


use  ferro-cuK-atc  on  a  larjjc  scale,  and  -  vauh  are  n..w 
\tv\uK  onstnuted  t<.  that  end."  In  his  opinion  all  the  jjreat 
shipl)uil(hnK  countries  will  have  to  adopt  a  similar  im.Hcv 
and  find  substitutes  for  iron,  steel,  and  wi-hkI 

Later  ne\vs|)a()er  rcpirts  throufjh  Holland  indicate  the  actual 
hitiidin),.'  '>f  "'O"  ton  concrete  motor  ships  In-  the  Clermans. 

The  larRcst  concrete  ship  ever  iniilt  is  the  Faith.  Iaunche<l  c^n 
MarchlJ.  I'MS,  at  Ked-v<KKl  City,  California,  by  the  San  Fran- 
cisco Shij)buililinK  C<nnpany.     It  is  ten  times  iarger  than  any 
concrete  vessel  on  record  in  the  United  States.     The  ves>el  is 
■•li'o  feet  lonp.  44 li    feet  wide,  :tO  feet  deep  and  draws  when 
loaded  1'4  feet.    The  floor  ha.s  a  thickness  of  4 'a  inche>  and  the 
walls  4  inches.    She  weiRhs  »;(«>  tons  more  than  a  steel  vessel  of 
similar  capacity.    The  six  bulkheads  and  the  deck  arc  also  ma<Ie 
of  concrete.    The  bcjttom  of  the  vessel  is  covered  with  a  woo.len 
water-tight   floor.'     Displacement   is   T.iMM)  tons,  carrying  ca- 
pacity r..000  tons.    .^)40  tons  of  steel  reinforcing'  in  the  form  of 
bars  anti  a  basket  work  of  steel  mesh  were  used.    The  bars  were 
welded  together,  thus  reducing  to  a  minimum  the  quantitv  of 
steel  re(|uired  by  avoiding  laps  that  otherwise  would  have  been 
necessary.     The  engines  are  oil  burners  of  1,:.')0  horse-power. 
The  speed  of  the  vessel  is  10  to  11  knots,  ICO  barrels  of  oil  per 
day  I)eing  consumed.    In  the  designing  of  the  vessel  no  provision 
was  made  for  water  ballast,  as  the  designers  believed  that  the 
heavy  concrete  floor  would  make  the  vessel  ride  evenly.     The 
vessel  was  launched  on  March   14.  exactly  as  previously  an- 
nounced, and  just  six  weeks  after  the  concrete  was  poured.    She 
was  fully  equipped  by  May  i,  passed  her  trial  trips  satisfactorily 
and  went  to  work  early  in  May.     The  cost  of  the  vessel  was 
$7.''.0,000,  a  large  part  of  which  is  due  to  the  fact  that  it  was  a 
first  attempt. 

Concrete  for  the  vessel  was  mixed  just  the  same  as  buildmg 
contractors  mix  it  for  a  building.  The  only  ditTerence  being 
the  amount  of  cement  used  and  the  size  of  the  gravel  stones. 

'  Philadelphia  f'liblic  Lidycr.  .March  IS,  1918. 


iJ.'JO         ISKLlEXfE   OF   TIIK   G«EAT    WAS    I  |V>!«    nillPPINC 

Smaller  Rravcl  ami  more  ccmem  wa*  the  rule  governing  the 
mixing  <>t  material  on  the  f-'ailh. 

Methods  of  Ruildinij  Concrete  Shi/>s. 

There  arc  itevcral  methotls  in  u»«  at  the  present  time  for 
the  liuililinj;  «if  concrete  ships  which  can.  however.  Ite  <livi<le<l 
into  two  general  groups.  The  f)r>t  method  consist*  in  ItuilrlinR 
forms  much  the  same  a^  is  done  in  the  construction  of  huildings. 
Concrete  is  |H)urc(l  into  the  forms.  Several  mixjiticitions  of  this 
schcnic  have  liccii  pcrfcctctl.  Internal  forms  arc  huilt  which 
can  Iw  removed  after  the  vessel  has  Iwen  launched.  Sometimes 
the  external  forms  are  liuilt  in  sections  in  such  a  way  that  they 
can  Im;  nunetl  alon^  the  ship's  side  as  the  construction  progresses. 
The  methixls  cominj,'  under  the  «.econd  group  follow  very  closely 
the  mcthiKl  invente«l  by  Carl  VVtIwr  of  1»U»  South  Michigan 
Avenue,  Chicago,  a  well  known  engineer  of  the  Cement  Gun 
Construction  Company  of  Chicago.  The  methoil  projwsed  by 
Mr.  WelMfr  consists  mainly  of: 

a.  .\  skeleton  of  structural  steel  with  memliers  runtiing 
transversely  and  longitudinally  throughout  the  hull. 

b.  A  system  of  reinforcing  steel  pkIs  supported  In  the  con- 
struction. 

c.  A  layer  of  wire  mesh  or  fabric  placed  outside  of  the 
steel  nnls. 

rf.  A  concrete  shell  in  which  the  reinforcement  is  iml)edded. 
Concrete  is  applied  by  means  of  air  pressure  in  a  modi- 
fied cement  gun,  directly  to  the  asscmbletl  steel  frame 
work,  no  forms  Ijcing  required  other  than  a  sort  of 
shield  held  on  the  side  opposite  the  cement  gun  and 
directly  at  the  jxiint  of  application.  When  concreting 
has  been  completed  and  concrete  has  hardened,  the  ex- 
posed surface  is  rubbed  down  to  a  fine  smooth  finish  by 
rotary  grinding  machines. 

The  method  of  consfructif^n  used  at  the  Fougner  yards  in 
Moss,  Xcjrway.  is  similar  u>  the  Weber  method,  although  no 


AMIPBIILOIXC   DL'RING   THE   W,MI  237 

mriictural  %tec\  \*  uwl.  Metal  lath  i«  formwl  into  a  «lnut)le 
wall  ami  concrete  ii  ixnircd  Iwtwcen.  Sunit  <>{  the  concrete 
wfirk*  nnt  through  the  perfr>rati<Mi«  an.|  lake*  the  *hapc  of  knob* 
iijv.n  the  two  outer  ♦urface*.  The«e  knolm  turm  in  turn  the 
Hiichorage  up<»n  which  the  coatinR  of  the  inside  ami  out%i<Jc  of  the 
ve*»el  are  laid.  The  steel  bar*  for  reinforcing  are  set  in  place 
l)et\veen  the  two  walls  of  metal  lath  liefore  concrete  i*  pourrd. 
The  outer  surtace  of  the  hull  i<  finished  hv  hand,  although  the 
cement  gun  may  Iw  used  to  apply  hulk  of  surface  coating.' 

In  Norway  the  work  is  mostly  carrietl  on  in  closed-in 
sheds,  slightly  heated,  which  provide  additional  advantages 
in  keeping  off  rain  from  the  structure  in  wet  weather,  and 
also  in  keeping  off  the  .sun.  which  by  its  heat  mav  cauM 
cracking  of  the  concrete  in  setting.' 

In  warmer  climates  such  structures  are  unnecessary. 

Launching  the  Concrete  Ship. 

Smaller  vessels  arc  built  and  launchetl  upside  down.  This  is 
done  because  internal  forms  can  be  used  and  the  concrete  applied 
more  evenly  than  would  otherwise  be  possible.  When  the  ves- 
sel strikes  the  water,  water  is  admitted  to  comprtments  causing 
the  vessel  to  right  itself.  In  the  case  of  the  :J00  ton  lighter 
launched  in  Norway  in  Augu't  of  1917  Iwtween  15  and  in 
minutes  were  required  for  the  vessel  to  right  itself.  Larger 
vessels  are  built  and  launched  much  the  same  as  steel  vessels. 
The  concrete  ship.  Faith,  was  launched  broadside. 

The  Advantages  of  Concrete  in  Shipbuilding. 

(a)    It  does  not  interfere  with  steel  construction.     Only 

the  steel  rods  and  steel  wire  mesh  are  necessary,  and 

rolling  mill  capacity  is  not  required. 
(6)    Materials  needed  for  the  mixing  of  concrete — cement, 

*  Scientific  .-Imi-ncan.  .Vovember  17,  1917. 
"  Clatgoiu  Htrald,  December  29,  1917,  p.  35. 


Us 


i>n.i>!(f(i    or   MiK  <iiir\r  wah  i'pon  «itii>rtS' 


Kfavrl.  jimI  mihI  -arr  ni  the  prfcni  ittnr  comfi^i- 
alivHy  |.!.!'ti(iil  vMih  titilimirwl  rc»ut»rcc«  Tl  .  \Mit. 
(lu.'t  rt    it  cfniffit  ii)crr.iv«tl  in  t'.»l7 

tr)  \  '•  4  ,Tc  I  \c»srl  i\,n  hr  Mult  i»>r  thr  pi  ni  cu-i  <t 
1  «  ..Mltt>  M'.rl  IHtrinK  th<-  »ummcr  t  l!M7  .1 
I  lit  v  Miii'ttiT  f  the  Amrricjn  (.■.mertie  lnMilim; 
4:i»l  lin-  .'•oit'and  ('etrwHt  A»«(wmfii>n  ItouwI  ,1 
'!«  K''  '  ■  '  .•Mil  n  «Mg<>mg  iKirge  ut  <  'st  per 
l»'t^  «icau  „i..ght  III  thi*  Ijarge  was  miip-  iwI  at  41. 
Tlif  liesi  ;i.  i!  !-!r  fijurv--  .h  to  cost  ,.f  a  ,tn\  \\u\t  ni 
the  »at'  n  r:  t  w- re  !r<»m  iiM»  !■•  *tsii  ^.^r  ton 
am!  tlic  cost  -ii  ;i  wmmI  hull  *To  tti  *i(M.  ^vsr  um.  In 
//i.'  Sihulifii-  .4>'  ncan  i^r  XovitmIh'  i  ;.  FtM7,  it 
wa«.  xLUf.,'  that  cmir-w*-  vT-»et  ,>itl.|  <  htiitt  t<.r 
»7:.tMXH)  ,,«  BRaiuxt  *2.«m«mHh,  ,  r  tin  1  rilinar*  »frcl 
ships  ..i  the  mitjv  -i/e.  1  he  Snippinjf  Ur.ar*!  '^tittiii ?e« 
»hat  a  coiicPTf  hull  can  Ik-  hii  U  tor  fn.m  ♦!;  i,, 
*7<»  a  ton  rhtaf)er  th  m  v  ther  \v<.  u  or  -tcvl.  The  ctwt 
of  cfigitKs  ami  li.iii  ..  wouhl  >»•  tin  satnc  lOr  ail 
clasics 

(./»  A  o.ticrcle  \e*<>el  tan  •  huilt  '  re  i|ui<.k!>  than  1 
btwl  vessel  or  n  \\n,  |  vessel  of  the  sime  capacitv.  it 
iv  istitnatetl  that  a  r.r.oo  ton  %ism1  can  he  c- ">piete<l 
in  !Mi  (law 

{<•)     I'or  the  conitniction  (M       >  i me  ships  a  much  cht 
(ilaiif  is  re(|iurr(!.  ihe  cost  |  n.hahly  l«ii  -  about 
twtiiiiflh  ni  the  cost  ot  the  >ii-el  ship  plant  ..i 
tMM>  as  cumpan<|  with  $.'.tti».tMM>. 

''/)    l.'n>kille<l   wori. -ncn  can   lu    usc<l,      It    is.  ot 
iicii-  ,nry  t.    luuc  ■^killed  workmen   i  ,1    the  A 
of   con-fruction.   hut    tcwcr    ire   needed  than 
case  «^    a  sted  slnp. 

(</)    The  concrete   -hip  is  nre-p?   of,  rat-proof,  rot-pro- 
ail  !  insect-pp'  M. 

(/))    Till-  cost  of  np-keep  i-.  ver        w.  .t  .J  repairs  c-ii' 
made  ea-ilv. 


Ill 


<er 


ir-.e. 

'  ion 

he 


'/) 


(k 


••sui'ft'  II.PIN.:    ni'NINli     .  ilr    V»,\R 


3ao 


■miH.fb  fmith  en 'i  k  gtvcn  f  jtt  i  icr-if  ship  winch 
n  '»Ke»  nciion  n  ihr  «atrr  lo  »  mmimum  The 
'm  ^.th     tirfari-      !*.)  prrvrnm   'he  aivvuiniilati.m   ,>f 

l«        '-      - ' 


I  >ti!t(ant  rlcincHl 


'  i"       •  !  awl  mrtal  ,hii. 
'    "cri  I    JH  Uuraliir;  witnts-  ih«  caic  oi  the 


it 

"i  i 

ihij) 


■>«n 


f1  that    SaniaKc*  to  c 
I,  a»  I     ,nl>  meant  tn 
f  the  4lamaKf 
t»  ivf  i|{inal      I' 


e  w- 

fh 

niuc: 

MCci  \^ 


ve^NrN  are 

nj;  the  rem- 

:i«  Ici  <  <l)tain 

I  he  saiii    ^rca 


lu^tly  in  the  u-rro-^  ncrete 
■  1 


-     -ermad  ferrrxo  .rretc  barge     I'-vivnl  cnllnion 
with  a  Khint-  steamer.*    .Vote  th    hari     -a  branding  oj 
the  American  H'h«>oner  above  mention.  ' 
Superior  rc«.iHtance  to  torprelo*-^  ,     tlnutetl  hv 

•iome.  bin  claimed  by  iliram  .\b.  ,  i  evplained  as 

follow*  ; 

Uwin^'  to  the  toiiRhnrss  of  thr  the  metal 

'•end*.  hol(N  toRethcr  as  lonn  as  |„  nd  irans- 

!iit»  the  force  of  the  sluxk  for  ^reat  ,  thr  ugh 

il»e  structure  (it  the  >hif.,  thus  niakiiij.  .  u-osive  dam- 
m^*.  Ill  inntrast  to  iht,  the  concrete  piiherizcs,  so 
that  the  torjicdu  sin-mls  its  cncrf-y  in  grinding  up  a 
small  area  id  concrete  rather  than  in  tearing  a  larRc 
hole  ,is  in  the  Mcel  structure.  The  ptilveri/ed  ma- 
terial is  also  i.  ,-e<|  by  the  torpe<lo,  thus  utilizing 
energy  whidi  wuuld  otherwise  destroy. 

'•  Disiidz-antiiKcs  of  Comnlc  in  Slii;>biiil<liny. 
(rt)     Ihe  di.sadvantages  of  the  concrete  ship  centcs   chiefly 
around  |.oiii:s  regardini,'  which  little  or  no  informa- 
tion  is   available.      Little    is   known   concerniii;r   the 
effect  of  the  sen  w.ives  and  engine  vibration  upon  the 

'Glatgou.-  Ucntld.  iHicmUr  J^,  1917.  p.  JS. 


;4(i 


INFLUENCE   OF    THE   GREAT    WAR    UPON    SHIPPING 


hull.  Smaller  vessels  as  in  the  case  of  the 
Namscnfjord,  however,  have  Ijeen  used  successfully. 
Action  of  waves  and  engine  vil)rations  on  the  larger 
vessels  such  as  the  l-aith  can  only  he  ascertained 
through  actual  experience,  which  fortunately  we  are 
now  getting. 
(b)  It  is  also  feared  that  salt  water  will  have  a  deterio- 
rating effect  upon  the  concrete,  but  it  is  peculiar  if 
2(1  years  of  experience  have  left  much  need  for  ex- 
periment in  that  field.  If  salt  water  is  a  menace,  it 
is  possible  to  jjrotect  the  hull  by  means  of  water- 
proof paint,  or  a  water-proofing  material  may  be 
mixed  with  the  concrete.  The  deterioration  is  caused 
by  action  oi  various  ingredients  of  salt  water  such  as 
magnesium  sul|)hate  upon  free  lime  in'concrete.  Cer- 
tain varieties  of  concrete  such  as  "  puzzolane  "  con- 
tain no  free  lime,  and  if  very  dense  concrete  is  u.sed 
it  is  not  materially  penetrated.  The  chief  preven- 
tions against  sea  water  are: 

(1)  Use  of  rich  concrete. 

(2)  Use  of  cement  containing  but  little  free  lime, 

gypsum  and  alumina. 

(3)  Addition  of  puzzolane  containing  silicic  acid 

to  fi.K  free  lime. 

(4)  Use  of  coarse  sand. 

(5)  Use  of  dense  concrete. 
(<!)  Special  surface  treatment. 

(7)  Protection  of  reinforcing  against  oxidation.' 
This  is  jjrobahly  the  most  menacing  of  all  the 
troubles;  much  reinforced  concrete  exposed 
to  sea  water  has  gone  to  pieces  because  the 
salt  penetrated  the  cement,  rusted  the  iron, 
which  makes  it  expand  and  burst  the  con- 
crete. The  engineers  should  Ije  able  to  get 
defense  against  this  by  one  or  all  of  the 

'  Scientific  ^Jmcricaii   July  J8.  1917. 


SMIPnriLDlNG    DLRING    THE    WAR 


241 


three    methotls — painting   the   iron,   water- 
proofing the  concrete  or  its  surface.     The 
Schoop  metal  spray  is  one  of  several  re- 
cent inventions  that  may  be  important   in 
this  work. 
'■--)    The  same  objection  has  been  made  against  the  con- 
crete ship  that  we  made  against  the  steel  ship  when 
vessels  were  first  built  from  that  material:  namely, 
that  it  is  too  heavy,  but  a  concrete  vessel  of  .1.000 
tons  capacity  weighs  but  fiOO  tons  dead-weight  more 
than  a  steel  vessel  of  the  sam'  capacity, 
(rf)    Concrete  is  not  flexible.     In  answer' to  this  disad- 
vantage, engineers  claim  that  concrete  is  flexible,  and 
in  fact  advance  this  argument  as  one  of  the  points  in 
favor  of  concrete  construction. 
(c)    It  has  been  shown  in  the  past  that  concrete  x-essels 
are  unable  to  withstand  chafing  against  other  vessels 
or  against  a  dock.    1 1  is  also  possible  to  protect  the  hull 
by  means  of  wooden  fenders. 
It  is  a  sad  commentary  on  the  ineptitude  of  man  that  we  know 
so  little  about  cement  as  a  ship  material  after  we  have  had  so 
much  time  in  which  we  might  have  learned. 

Lloyd's  approval  of  Concrett  Ships. 

Lieu,  i  Register  of  Shipping  has  approved  plans  for  the  con- 
struction of  several  reinforced  concrete  ships  with  a  view  to 
classification  by  the  society.  As  mentioned  before,  they  have 
also  given  an  A-1  rating  to  the  Naniscnfjord.  This  approval 
by  so  conservative  and  authoritative  a  body  should  be  given  great 
weight.  Concrete  vessels  were  building  on  the  west  coast  of 
Scotland  in  January,  1918. 

Present  Concrete  Ship  Program 

The  use  of  concrete  in  shipbuilding  was  brought  to  the  atten- 
tion of  the  Senate  Commerce  Committee  on  January  ^i)    lois 
by  Ray  Robinson  of  Chicago.     The  committee  recommended 


242         INFLUENCE   OF    THE   GREAT    W  AH    IPON    SHirPING 

immediately  to  the  Shipping  Board  that  the  use  of  ccncrete  in 
shipbuilding  ]x  investigated.  On  February  2  the  Board  let  con- 
tracts for  ten  .{..'.OO  ton  vessels  to  the  I-'erro-Concrete  Shipbuild- 
ing Company  of  Rcdonda  Beach,  California.  The  company 
claims  that  it  will  use  a  newly  pi  tented  scheme  of  construction. 
The  San  Francisco  Shiplniilding  Company,  the  builders  of  the 
Fditli,  have  plans  to  build  ."(4  s^hips,  some  of  much  larger 
capacity. 

Contracts  for  forty-nine  of  these  vessels  were  let  about  the 
time  the  Faith  .sailed. 

The  success  of  this  ship  resulted  in  the  announcement.  May 
1.  litis,  by  the  Cleveland  Builders  Supply  Co..  that  it  proposed 
to  establish  on  the  siiores  of  Lake  Erie  ( Cleveland )  a  yard  for 
the  construction  of  concrete  vc-scls.  the  ships  to  be  for  lake  and 
canal  trade,  thus  releasing  lake  vessels  for  sea  service.  They 
are  to  bu.  .'  four  vessels  at  a  time  of  1.000  to  2.000  tons  ca- 
pacity, steam  propelled. 

It  seems  reasonably  certain  at  this  time.  May  30.  1918.  that 
the  latest  word  frrm  the  cement  ships  is  one  of  success,  and 
during  this  calendar  year  we  shall  know  how  much  we  can  depend 
upon  them.  At  present  it  seems  quite  likely  that,  if  this  suc- 
cess continres,  we  shall  be  in  a  position  by  the  end  of  summer 
or  certainly  before  the  beginning  of  winter  to  start  concrete  ship- 
yards by  the  dozen  on  the  estuaries  of  the  South  Atlantic  and 
Gulf  States  and  the  California  coast  where  they  can  work  unin- 
terruptedly through  the  winter  v  =th  little  or  no  protection,  and 
turn  out  hulls  by  the  score  or  hundred.'  It  is  possible  also  that 
we  shall  develop,  as  has  been  suggested,  interchangeable  parts  of 
the  ship  it.self  to  the  extent  of  making  detachable  engines  which 
can  in  five  minutes  time  be  uncoupled,  lifted  out  of  one  concrete 
hull  as  she  lies  at  her  pier,  and  dropped  into  one  of  her  hundred 
sisters  that  happens  to  be  alongside,  thus  permitting  one  engine 

'  f)n  May  25  .-x  board  of  tngiiieering  experts  recommended  to  the  United 
States  Shipping   l.oard  the  buildinR  ot   five  Koveriimcnt  yards  for  buildiiiK 
concrete  ships,  and  it  is  understood  that  the  locations  were  to  be  Wilmineton 
.\.  C..  Jacksonville.  Ha.,  Mobile.  .Ma..  San  Francisco  and  San  Diego   Calif' 
all  of  them  locations  permitting  virtually  continuous  work  throughout  the 


SHIPBflLDING   DLRtNG    THE   WAR 


U3 


to  run  at  least  two  ships  on  the  North  Atlantic  Ferry.  Such 
plans,  if  proved  by  September  1,  1918,  by  the  experience  of  the 
pood  ship  Faith  and  other  cement  vessels,  might  enable  the  cement 
ship  to  be  of  material  aid  in  feeding  Europe  during  the  hungry 
time  of  May.  June  and  July  just  preceding  the  European  harvest 
of  11)10,  which  will  be  a  hungry  time  alike  in  peace  or  war,  and 
to  finally  be  the  deciding  factor  in  restoring  tonnage  despite  the 
submarine. 


CHAPTER  IX 

Shipbuilding  in  the  United  Kingdom 

A  Problem  in  Bl-sixess  Administration  and  Government 

CONTROI. 

British  sliiplniililing  cliirin<,'  the  tir.st  three  and  a  half  years  of 
war  otTers  an  intt  resting  study  in  inihistrial  management.  It  is 
a  story  of  struggle  for  efficiency  tlirough  the  reorganizing  and 
nationalizing  of  an  inchistry  embarrassed  by  war  but  thoroughly 
set  in  its  ways,  satisfied  with  itself,  operated  by  a  labor  supply 
hifji.ly  organized  and  ,!tcply  intrenched  by  a  host  of  restrictive 
and  protective  rules,  and  further  backed  up  by  a  very  strong 
political  influence.  Xevertheless  it  has  been  almost  revolution- 
ized, as  was  indicated  by  the  discussion  of  standardization  in  the 
last  chapter. 

The  Government  Commandeers  Yards  and  Dictates 
Output 

When  rising  freights  sent  the  British  owner  scurrying  to  the 
shipyard  gate  in  the  autumn  of  r.tl4  he  foimd  it  closed,  or  he 
found  himself  ejected  even  if  he  bad  the  luck  to  get  mside.  The 
yards  were  commandeered.  The  British  Government,  accepting 
the  idea  of  a  long  war  and  realizing  anew  the  necessity  of  a  great 
war  lleet.  commandeered  nearly  all  the  shipyards  of  Great  Brit- 
ain, put  them  at  all  kinds  of  nava!  work  from  superdreadnoughts 
to  submarines  and  mos(|uito  boat  submarine  chasers.  Extensive 
contracts  for  these  last  were  also  let  in  the  United  States.  This 
meant  that  merchant  shipbuilding  was  brought  almost  to  a  stand- 
still, and  continued  so  for  many  months,  unfinished  vessels  being 
left  as  they  were  when  the  men  moved  over  to  the  war  work. 

Many  scores  of  merchants  ships  are  lying  on  the  stocks  im- 
iinished.  and  as  many  more  on  builders'  books  have  not  been 

244 


SIIIPBL'ILDI>fG    IN    THE    INITED    KI.VCnoM  2V> 

cornmenccl.  Ml  this  work,  indefinitely  h«n«  up  l.v  the  war, 
u:I  ha  e  to  he  complete!  when  circumsta.ices  will  allow 
nml^   when    that    will    he    no    one    as    yet    has    any   clear 

The  Cly<le  Armaments  Committee  even  proposed  ^  to  close 
down  hve  Clyde  yards  that  were  not  working  on  gover.mient  con- 
tracts  so  that  the  men  could  go  to  Kovernment  work  in  other 
yards— with  compensation  to  the  closed  vards 

uy  Octoher,  l!.in.^  there  were  some  >igns  that  the  official  mind 
was  hegmning  to  get  interested  in  merchant  shipbuilding  High 
freight  rates  had  l)ecome  appalling,  and  the  lack  of  naval  hattles 
and  the  mcreasmg  loss  by  nibmarines  were  l.eRinning  to  show  the 
pressmg  need  was  tor  freight  carriers  rather  than  war  vessels 
In  December,  191. "i.  buiUlers  in  the  Newcastle  <listrict  were  given 
permission  by  the  Admiralty  to  procee.l  with  mercantile  work 
that  they  had  m  hand  whenever  the  government  work  thev  had 
on  the  stocks  wcnild  allow  them  to  do  so.* 

The  importance  of  this  permission  is.  well  illustrated  bv  the 
case  .„  a  freighter-  which  had  already  l>een  King  three  months 
at  the  engme  firm's  docks  waiting  for  two  weeks'  work  in  com- 
pleting her  engines,  and  giving  to  her  prospective  owner  the 
anguish  ot  huge  missed  earnings,  of  which,  however  l-Jj 
•id.  .n  the  pound  would  have  gone  to  the  state.  By  the  middle" 
of  March.  1!)1(|.'>  the  government  had  become  increasingly 
.merested  in  merchant  shipping,  and  issued  further  permission  to 
builders  to  complete  merchant  vessels  already  on  the  stocks.' 

',  f/r,^''';',"'''C.*'.v.  Ttily  16,  191S,  p.  459. 
•  Ihid..  M.iy  21.  1915. 
/bid..  December  22.  1915 

.5'^S  ':^'yr^':tt^'t  l'^:;!^! -"L°f  i^^  y^^'^.^  down  for 


-^"t^l^ll^Z^SE^?!^^^^^^ 


'ibid..  March   17,  1916 
just  as  necessary  as  .he  ,„crease'of  nUbeVr^f  wa^ship^." T^r.^TaT'l^b! 


•JM  rSKLL  I  Nli:   OF    TIIK    i,Hi;.\T    WAR    lI'uN    SIIIPPINTi 

lifforts  were  made  to  clear  the  hertlis  of  war  vessels.  Then  the 
real  difficulty  of  the  situation  Iw^an  to  show  itself.  There  hegaii 
to  Ik;  vacant  hcrth-;  and  neither  men  nor  materials  available  to 
lay  down  more  shipping,  and  stagnation  in  merchant  building 
therefore  continued.' 

The  pncess  of  transference  to  merchant  work  went  on  steadily 
through  the  year  I'.Mti.  Hy  the  middle  of  July-  in  one  district 
all  shipyards  with  two  exceptions  received  official  notification  that 
if  they  had  completed  current  .\tlmiralty  contracts,  their  forces 
wouhl  nut  i)e  rei|uired  for  further  gt)vernment  work  and  they 
would  be  free  to  <levote  themselves  solely  to  mercantile  orders. 
On  the  other  hand  the  two  excepted  establishments  were  to  be 
retained  for  war  work,  showing  a  wise  pcjlicy  of  definite  speciali- 
zation in  work  of  difTerent  yards — a  tendency  of  the  times  that 
the  war  has  emphasized  in  British  .shipyards. 

The  output  of  merchant  shipping  for  the  years  19 13  to  lit  17 
sh(>ws  '  the  e.Ntent  to  which  this  industry  has  been  submerged  by 
t'^e  necessities  of  war. 

No.                               ToTinaKc  I.H.P. 

191.1  1424  1.977.600  gross  1.556,600 

1914 Ii94  1,722.150  1,366,900 

1915  517            649,340  540,600 

191(,  412            582,300  410,280 

1917  1,163,474 

If  shipowners  could  have  got  all  the  ships  they  wanted,  Eng- 
land would  have  built  ten  or  fifteen  million  tons  in  1015  and  again 
in  lint!.  .\s  it  was,  the  figures  of  output  were  so  far  Ik-Iow  the 
.submarine  sinkings  that  the  year  and  a  half  from  the  middle  of 
July,  1!)H!,  to  January,  litis,  marked  a  period  of  feverish  at- 
tempts to  bring  about  organization  and  efficiency,  so  that  by  read- 
justment a  nation  with  reduced  lalwr  a^id  reduced  materials 
might  maintain  a  navy  and  restore  a  mercantile  marine.    What 

niary  24.  1916.  p.  321.)  He  further  stated  that  less  necessary  war  work  had 
been  allowed  to  stand  aside. 

As  lati.  as  the  spriiiR  nf  191S  there  were  still  at  least  two  uncompleted 
nn.rcli.int  ^hlps  that  had  been  started  before  the  war  began. 

'  Ucvcrs   H'ccklw   Fcbr  ary    10,    1916. 

'  Ihid..  July  21,  "1910.  p.   11. 

'  IhiJ..  .May  4,  1917,  p.  8. 


SHIPBLILDINC,    IN    THE    INIlED    KINGDOM 


247 


could  l)c  done?     First  of  all.  labor  had  tu  l*  reckoned  with, 
for  a  ship  runs  back  in  a  hundred  directions  to  la'  man 

power. 

The  Labor  Question 

In  the  matter  nf  labor  three  entirely  different  problems  pre- 
sented themselves:  (a)  The  diplomatic  and  political  task  of 
utilizing  and  changinjj  the  unions  so  that  laljor  might  Ije  had 
willinR  to  Ik;  used  to  the  I)cst  efficiency,  for  the  greatest  output 
rather  than  for  merely  the  greatest  wage,  (b)  The  getting  of 
more  workers,  (c)  The  scientific  utilization  of  this  labor  to  mnke 
the  greatest  national  output  rather  than  the  greatest  gain  for  the 
individual  employers.  In  briet.  apply  scientific  management 
and  get  labor  and  capital  alike  to  stop  profiteering. 

Getting  the  Unions  to  Unbend 

From  the  stantlpoint  of  ma.\imum  output.  English  lalwr  unfor- 
tunately was  thoroughly  organized  and  committed  to  the  suc- 
cessful policy  of  limitation  of  output— that  curse  of  modern  so- 
ciety, that  pet  device  alike  of  capital,  of  lalwr  and  of  trade,  in 
fact  an  instinctive  desire  of  all  of  us,  which  seeks  by  reduction 
of  output  to  enrich  itself  by  creating  scarcity  and  high  price  and 
thus  taking  profit  through  the  impoverishing  of  society.  The 
British  capitalistic  classes  had  grumbled  helplessly  at  this  labor 
union  policy  for  many  years,  but  now  it  became  a  vhal  question 
and  under  the  pressure  of  national  necessity,  the  urge  of  pa- 
triotism, the  menace  of  a  foreign  enemy.'  British  labor  in  the 
munitions  industries,  made  a  Ijargain  early  in  1015  with  the 
government,  by  which  labor  promised  to  stop  limiting  output. 

J.'  "^^^  pro!''?'"  ai"!   the  thoroiiKhlv   British   policy  are  well   stated  in   an 
editorial  in  Fairplax.  November  16.  1916.  p.  706 

-.n^'i^L",-^'"'  ''i""'"'  '•'■'"  "'"''  ¥^  ""*  «"""Rh  '"''"  for  shiphuilding  and 
cnKineermK  aiid  nmnitions  manufacture,  and  also  for  the  armv.  On  a  mere 
counting  of  heads  we  can  not  take  men  from  industry  without  weakenina 
uvlustry,  and  wo  can  not  keep,  or  take,  men  from  the  army  without  wcaken- 
niK  the  army.  So  we  must  shuffle  labor  and  dilute  it.  and  coax  and  push 
into  industry  peop  e  who  have  been  outside  its  ranks  hitherto,  and  pay  hinh 
wages,  and  work  lots  „l  overtime,  and  .-.dop,  every  other  expedient  wc  can 
think  of.  n  this  matter  there  is  only  one  policy,  that  of  never-endine 
compromise.  •■>-•>.•  euuiub 


J48         INKI.rF.NCK   OF    THE    CRF.AI    WAR    ITON    SIIIPPISO 

The  KiiviTnineiit's  aRrcciiicnt  with  the  tr.uk-  unioH'*  rcfjard- 
inK  the  conditions  which  are  to  govern  lalnir  during;  the 
period  of  the  war  in  the  pnxluction  it  munitions  is  so  jjoml 
a  barjjain  from  the  men's  point  of  view  that  it  is  ditVuiilt 
to  l)cheve  in  the  sincerity  of  the  exceptions  which  are  l)eiiifj 
taken  to  it.  It  is  ajs'reed  by  the  unions  that  while  tlu-  present 
demand  for  munitions  lasts  tlwri'  shall  be  no  impediment  to 
the  employment  on  suittible  nuuhinex  of  zeomen  or  semi- 
skilled men.  l-'or  its  part  the  ijovernment  undertakes  that 
there  shall  be  eompletc  rczcrsion  to  the  status  quo  when  the 
hostilities  cease.^ 


Fortunately  this  mental  evolution  on  the  part  of  munition 
workers  was  in  the  process  (jf  time  duplicated  in  the  shipl)uil(linK 
field.  The  process  was  slow  and  gradual.  In  September,  lit  15, 
/.loyd's  Weekly  ( Septemlwr  l.'>)  reported  the  men  working 
"  well,  never  so  well.  "  lUit  a  month  later,  it "  reported  that  as 
the  process  of  transference  of  labor  from  war  work  to  merchant 
work  was  beginning,  men  refused  to  be  transferred,  although  the 
wages  were  as  sood  and  better.  They  regarded  building  a  war- 
ship as  a  patriotic  enterprise,  but  they  did  not  care  to  "'enrich 
grasping  shipowners,"  so  in  some  cases  they  refused  to  build 
merchant  ships.' 

This  is  one  of  many  evidences  of  the  strong  opposition  of  the 
British  public  to  the  shipowner  and  his  profits.  Prices  were  up, 
the  newspapers  were  full  of  stories  of  enormous  freight  rates  and 
[;reat  shipping;  protits,  and  it  was  but  natural  that  the  average 
person,  particularly  among  an  island  population  whose  living 

'Lhyd's  Weekly.  March  26.  1915,  p.  207. 

Students  of  sociology,  economics  and  labor  should  look  forward  with 
great  interest  to  the  workings  out  of  this  bargani.  this  perinission  to  revert 
to  the  policy  of  impoverishment  at  the  end  of  the  war — that  policv  Vich  we 
all  see  to  be  erroneous  in  (jeiieral  and  all  want  to  practice  in  ou  i  par- 

ticular cases. 

^  Lloyd's  IVeeklx.  October  15,  1915.  p.  667. 

'  liefo.-  _,encra[  increases  in  merchant  shipbuilding  wages  came  tlu  re  was 
also  a  lut  (if  haggling  over  the  fact  that  men  did  not  desire  to  retu.-n  to 
merchant  shipbuilding  because  the  government  in  nearly  all  cases  paid  27Vi 
per  cei.t  extra  wage  I'or  warship  work  on  the  assumption  that  it  was  heavier 
work  .-\t  the  end  of  December,  1915,  a  munitions  tribunal  at  Kdinburgh 
fined  59  men  20  shillings  each  under  the  Munitions  nf  War  Act  for  absenting 
themselves  from  a  Grangemouth  shipyard  which  was  a  "controlled"  (com- 
mandeered) establishment,    /"air/i/aj',  January  6,  1916,  p.  25. 


siiirni  iLDiNo  IN  THE  vsntt}  kixodom  .mj» 

came  from  ships,  sh.nil.l  conclu.Ic  that  thqse  prof.ts  «ere  rcsn.,n- 
'.il)lc  f(.r  his  hij,'h  prices.  cs|wciallv  in  f.MHi. 

There  were  frequently  small  lalx.r  .hfficuhies  and  .lissatisfac- 
tinns  .I.mnK  U>V,  an.l  .  arl>  in  l!.l.i.  Ipon  the  whr.Ie.  laln.r 
pruve.I  .tselt  amenal.Ie  to  instructi.m  to  a  cnnsi.leral.le  extent 
The  fact  that  ,t  was  so  thoroughly  urRani.e.l  enal.le,l  it  tn  h. 
•leak  w:th  (lehn.tely  as  a  mass,  a  fact  not  appreciaterl  .,  the 
I  tilted  states.  F.,r  example,  .lelepations  .,f  munition  workers 
union  ofhcials.  waited  upon  Lord  Kitchener,  were  told  the  facts' 
went  hack  to  their  men.  and  straightened  them  out  on  the' 
matter  oi  hvmg  up  to  the  munitiyns  agreement  ' 

L-nion  rules  were  relaxed.  The  stringency  of  the  union  re- 
strictions agamst  apprentices  and  other  unskilled  workers  was 
relaxed,  an.l  particularly  the  stringent  rules  wherehy  each  par- 
ticular  worker  must  stick  to  his  particular  branch  of  the  trade 
were  lessened  under  the  ever  increasi.,g  pressure  of  national 
necessity.' 

The  labor  union  restrictions  against  machines  were  waived  to 
the  great  iK-nefit  *,f  the  output.     The  extent  to  which  this  "flat 

nn  l"?'"!'  ''?"*r"'  ""'"''-■•  '^'  '■^^"^^'  »"  "-^^  ^fi^^i^nt  maciiines 
and  tools.^  has  been  insisted  on  by  organized  British  later,  is 
Hard  for  Americans  to  understand. 

The  labor  policy  at  this  time.  1910.  was  a  combination  of 
diplomacy  and  authority,  for  an  October  strike  in  Glasgow  was 
by  royal  proclamati(,n  ordered  settled  by  compulsory  arbitration 
ttnder  the  Delense  of  the  Realm  Act. 


Getting  More  Workers 

The  relaxation  of  union  rules  aided  greatlv  in  the  getting  of 
more  workers.     By  June.  I'.tKi.  it  had  Ixen' discovered  on  the 

'IJoyds  Ifeetly.  .\pril  16.  1915.  p.  255. 

m'^mllr  %"""''"  """u  "'^"''.va««.v"«;ne  blow  pipes  shonl.l  bear  to  ?he  .o°^ 
number  of  men  on  the  job.     By   this  means  they   would  have  to  use   Xw 

r.;;'iieT';:?,t  ^5t;;*^,7>v';;.'^j'c;"l?i;'"'  ^""*"^ ""'"  ''^^  "!::■  '^7 


L'.'tO         INFriKNtf.    I>¥    TIIK   liMKAT    WAM    L  I'ON    SIIIPriNn 

Clyde'  ih.i;  wnmeii  miild  do  a  MirprisinR  numh«r  )f  proce!iies 
ill  shiplunMitin  work  for  which  they  had  never  licfure  Iwen  con- 
sidered, not  only  working  in  machine  shops,  inside  the  nliip-, 
hut  c\»n  out  in  the  yard-*  in  fhe  rounhcr  «ork.  A*  an  example 
of  Woman's  etticiency  in  this  work,  it  had  U-cti  found  that  not 
only  (.ould  ;<he  run  many  machim-s  quite  as  well  as  a  man,  but 
a  «ooil  many  vessel;.  ha\e  had  all  the  cltctric  wirinii  d'-ne  hy 
uonuii  Hut  it  is  in  the  ciiKine  liuilding,  in  the  ina- hinc  shop. 
th;i;  ^li*-  has  done  her  greatest  \Mirk. 

During  the  summer  of  IlUti  the  government  applied  to  ship- 
Iniildtnn  the  |Hi|ic>  previou'ly  applied  to  munitions,  that  of  hnng- 
ing  Imck  skille<l  workers  from  the  front  whither  they  had 
gone  t(\  thfjusands  .ifter  eiilistinj,'.  flu-  SliifhuiUvr  (  Septemlicr. 
I'.'lt;)  heralds  the  reti-rn  to  the  yards  of  "many  of  the  large 
numhir  who  enlisted."  It  alsi)  herahls  the  further  increase  of 
thi-  force  hy  the  constant  dilution  with  unskilled  lalwr.  including 
WDnieii. 


Rearraniiimj  Labor  for  Sationnl  Rather  'han  PriuUc  Gain 

In  the  autumn  of  liilti  the  shiphuilding  pricticcs  received  a 
shakeup,  for,  through  the  suggestion  of  a  government  committee, 
there  was  tried  <nit  on  shipyards  (^n  the  Uiver  Weir  a  policv  of 
pooli.ig  lahor  which  exjicilited  output.  The  yards  were  so  close 
that  ;i  man  cotij.l  jjo  to  any  one  of  eight  or  ten  yards  from  his 
hemic  with  case.  Lnder  the  old  narrow-trade  single-yard  svstem 
there  was  a  lot  of  lost  time,  one  group  waiting  for  another  to 
litiish  some  part  ai  the  ship.  Certain  processes  must  lie  finished 
in  sct|neiicc,  and  it  is  very  difficult  even  in  peace  times  t(j  keep 
them  all  Mowing  m  such  a  way  that  everylx)dy  is  husy  all  the 
time.  Sometimes  this  trouble  became  worse  through  the  em- 
barrassed supplies  of  materials  during  the  war.  Hv  this  new 
arr.ingenieiit  the  plants  shifted  workmen  around  so  that  all 
workers  .  f  tvt-ry  kind  could  be  busy  all  the  time — a  thing  ([uite 
impossible  in  a  single  yard. 


Lhxd\ 


.kly,  June  16,  IOUj. 


siiiPBi  U.IHNG  IN  Tiif  rsnwn  Kixr.onM 


331 


Another  part  o{  thi*  WVir  plan  '  wa«  thr  lninfhin«  of  wc.rk 
..n  all  ,hip.  that  werr  nearly  .lone,  so  that  thcv  tnight  \k  put 
in  thf  water  a^  .puckly  a*  p.M»ihle,  I)cci*ion  as  to  lh«  f.<M,m,{ 
of  thr  nx.lMl.  falior  „n  the  Nhij.,  that  cou|.|  U-  iini,hc<|  fir,t.  Ia> 
in  the  hand-,  of  a  l.«al  cumniittec.  c.m>j)4)ictl  of  the  loial  Uianl 
of  iraHe  surveyor  and  (he  surveyor  of  l.lovils  RctM^ter  of 
Shippinj;, 

Ihe  kiver  T>nc  ,  XevvcaMle  district  i  alm..*t  immediatefy 
copirl  ihf  Weir  plan,  which  shorilv  hecanu-  Rcneral  in  it>  appli- 
c.iti..,,.  My  |;»|s  j,  v^;,^  rt'iKirted  in  sotne  sections  to  lie  l.iit  little 
used  for  the  lullowinR  reason^  ( 1 )  The  emplovcr  wa>  afraid 
I"  let  a  man  jrct  away  for  even  a  day  for  fear  the  rival  woul.l 
keep  him  {-J)  There  was  smh  lalx.r  shortage  that  there  was 
Mrtiially  no  waiting  for  uork,  a  condition  which  priority  in 
materials,  with  con>c(|uent  more  deiwndal.Je  supply.  ha<l  helijed 
to  pnKtuce. 

hese  changes  in  the  habits  ..f  organized  laf«,r  were  made  as 
a  isnlt  of  much  patience,  tact  and  diplumacv.  anti  as  a  result 
of  conferences  winch  may  l)e  said  to  have  res.dted  in  treaties, 
l-or  example,  the  .\dmi^aIf^  appointe.l  Mr.  I.vnden  McCassey 
as  Director  .  f  Shipyard  l.ahnr.  and  he  addresse.l  one  F.alxir 
Union  Conference  after  another,  jwrsuading  their  workers  to 
relax  their  rules  and  l«Tonic  national  m  their  point  of  view. 
In  Octolwr.  fie.,  y  Balfour  con-ratulafe.l  .Mr.  McCassey 
upon  |)ersnadinr  the  l.iverfXKil  district  committees  (Lalnir)  to 
adopt  such  a  !  :  .ti  uhich  Mr  P.alfour  said  was  "of  the  greatest 
national  value  .uid  importance."'  Five  m-nths  later  Mr  Mc- 
(.assey  was  still  at  it,'  and  was  generally  credited  with  having 

■ /-"iji>/i/(iv.  Decrmber  U.   !  i|0 

I  Uny,n  n;;-kl\:  n.  N.Ser  D.  1916.  p.  J. 

Mr.   l.yiukn   .Mcta>siy.   K.C..   Dinctor  of  Shipvar.i   1  .ibor   addn-.^ofl  , 

larKely  altcn.lcl   mcetmK   „f   trad.,   unior.   .IrlrBatr,  this   af  r^m,„n    in    NVw 

in    b    h     •^^"'I'^'-r'  »'  ^'".'^^  •'"■  K"^">"T.int  ,cl.eme  for  orgini^i^a  later 
in  the  •ihipyar.U,  docks  and  maritu  cnKinc  works  "rK»numg  laDor 

Ihe  tran^jtr  of  men  from  yards  and  shops  where  they  are  not  renuire.l 
to  yard,  and  shops  where  they  are  required  the  susiH-n^n  U  ,he  per  o 
of  the  war  of  all  cuMoms  restrictini:  output  the  iiitrcliict  on  a.,,1  ,hl„. 
to  the  greatest  ,K,s„hle  extent  of  all  t,me1.,„l  lal  /av  rappliaU  such 
»>  I.n<«mat.c  tools,  hy.lraulic  and  electric  tool,  and  oxyKUM.-aie  W  mTuhV 
i^,'"*';;;'\V'""  "'  ""  •-•PP^'Pnau.  system  of  payment  hv^'^^ulK  wh,  h  w  u  d 
Mcure  to  the  Rovernment  a  gr.al.r  .utptit  an.l  to  the' w„rker    larger  earn 


IN:  ■  I      S«.K   t»r    T   I" 


,1.\T    WAH    I  WOI    N||||>|>INi: 


Uiiiii'vctI  the  iMtiotial  aduption  of  "  laitDf  diluiion."  TItt*  tlenl- 
nij;  Willi  lalnir  >'l  a  reguin  .-«  Wiu  i?i<lH\ite«  an  ii*|Hft  "t  the  lUiia- 
tum  irotii  which  \mcrica  in  ihc  prr'^eiit  vmcrRency  ha*  umt<>ul4- 
t'llv  »utfcr«'i|  l.i)|;h!>h  lalnir.  m>  hinhl)  orKani/rJ,  lan  tw  iltalt 
with  a*  a  Ilia*-!,  while  American  lalmrcan  in  many  cu'^is  M.arccly 
he  (Icati  with  ut  alt  Itcv'atuc  <ii  the  cha<>»  re»uttiii|{  (rotit  it»>  great 
lack  •'('  orjjanu.ition. 

I'aymcHi  by  Kcsiiitt 

(.rvat  eittirt  wa»  ttuide  at  this  time  to  intriHlticc  payment  hv 
Ti-^iilt-  rather  tliaii  |)a>nicnt  by  mere  time.  Mr.  I.lnvd  (ieor^e 
maik  ,  -tatvnicnt  '  tti  the  effect  that  wherever  the  system  ha<l 
liccii  intrMilncetl  there  \sa'<  an  increasie  in  the  output  of  a  nhip- 
yanl  l)\  .<».  ;i<>,  ami  e\cn  40  per  cent. 

Stati  <  OK  Uurrisn  Huipbl-iiding  at  the  Beoivninc  or  H)17 

As  a  result  'i  the  polic)  of  "diluted"  lafKir  by  unskilled 
per*on^  <4  any  -uri  \  ho  r.nihl  do  the  work.  Uritain  had  more 
jH-npU  ciiKaRed  in  shipljuilding  in  l!tlT  than  ever  V'tore.  an'i 
while  tiRiires  were  for  reasons  ^if  public  defense  withheld,  the 
First  Lord  <>!  the  \dmiralty  declare<l '  that  there  was  a  >4''''ater 
output  than  any  year  in  British  history,  and  that  '.mK),ooo  worker* 
were  employc<l. 


The  Woman  SliifbuUdcr 

i)i  these  workers  a  surprisingly  larjje  and  rapidly  increasing 
nuinlur  were  W'imii.  A  corres|X)inlent  of  Tlw  Xav  y'ork 
Tiiiuw  I  SeptemU-r  ;m.  I!»l7i  said: 

iiiK*  for  the  inrmtcd  ouipiit  and  thf  iiitrndiiction  of  i  reaionabic  system 
i.f  inttrchanKi'ahility  of  work,  mi  thai  llic  work  of  i  nc  trade  for  which 
ihcri  wirr  not  any  iradr^nuii  .workers)  for  that  trade  av^ilablt'  should  be 
umkrtakiii  l)j   the  tuare-t  apiiro|irialt  trade. 

It  «.i-  t'xplainid  h>  Mr  \\i:\  ,,.,-y  that  thi  forenoiiiB  proposals  were 
iiiuikIkI  tu  Mtdi/c  to  the  licst  a<Katitage  the  existinn  skilletl  men  in  the 
countr).  aiwl  lli,it  \i(hen  »inh  tnrasiire-.  were  insulftcieni  to  meet  a  shortage. 
Iheir  iliUilioii  ..r  the  nitriKhiiti.m  of  '>eini-skilled  labor  to  perform  more 
skilled  work  •.hould  he  introduced      {.Lloyd's  ll\\-kly,  March  JJ.  l'>!7,  p.  5.) 

'  I  lUrfLiy,  .March,   1917.   i..  *>•». 

'  ti/djf/oti-  Herald,  UeccmlMrr  J9.  1917. 


•IIIMCtLfHMO    IM    Title    t-NirCD   KI.'^lJDOM 


25.1 


But  in  she  shipUiiltliuK  >3r«l»  ihey  ilo  work  rtwt  htrtlo- 
fi)rc  was  fli'iir  h_v  ^irntijj  rticn. 

In  every  yanl  iherc  are  humirnl^  <n*  ihetn,  anit  in  one 
nlani,  ju%t  vmt<n\  \n  a  «afT  correapiindrnt  nf  tlw  A»««ia»e(l 
I'ri  «^.  t.tMMi  u{  thtm  arc  enipl<i>eit.  They  are  tlre-xieil  in 
kh,.  riniscrs  ami  l»el|ei|  aat*.  ^htch  reatfh  well  aUtve  the 
knee».  I'heir  hair  is  tucked  up  under  little  round  khaki 
c.i|>»  Hut  they  cmild  never  Inr  mistaken  fur  men.  Xearh 
all  i»(  thtij  msist  upim  wearing  high-heeled  ohtws.  and  their 
taste!!  run  to  !«ilk  stcxrkini;.. 

Aruufid  a  j,MKanti*.  machine  nn  the  liank^  (d  the  Clvde  the 
CDrrfifv indent  law  «even  girU.  mme  over  -'<»,  liit  i  li^avy 
stcrl  piatv'  and,  while  ...me  held  it  in  place,  one  guided  a 
punch  and  another  v  ung  a  lever  op^ratinu  the  punching 
mechani»m.  They  ^^cn  working  a»  n  their  live*  depended 
upon  speed,  ami  the-   worked  like  a  well  trained  team, 

The*r  ifi'orts  .ih  -ihipvard  w  trkcr*  received  unmitigated  prai«e. 
The  .1/.,      .•  Rdiav.  '  •!  .  IMT  p  2.V),  >ays: 

F    Kellaw,  ml         '    !     iiritish  Parliament  and  par- 

liHrnenfar)  -  i  th;-  :i    ..stry  i,i  Munition*,  recently 

-tatfd  that  ]■  <<  -■  i  ;'Mnk  he  exaggerated  in  sa.MTig  tliat 
Irt't  for  the  Wi  i'  i!,j.  i-  nen  had  *l  in  the  munit'.;)  Nhop« 
of  tireat  Bri;  '.';■  <-..'rinans  hy  nv  .v  wouM  'uve  .von  the 
war.  Women  \vt..  .iuing  nTi|H)rtant  work  in  iii.iriiic  engine 
Iniilding.  mcluding  tnr-iing  and  connectuv  •>-<!  |  lopeller 
shatt  liners,  and  most  of  the  drilling.  So  wide  was  the 
i^o[)e  of  wonioti's  lalwr  that  a  pro.rvr.enf  British  engineer 
expressed  hi^  tit.n  conv  .'ion  that,  givon  'wo  more  years  o{ 
var,  ho  \\..uld  under  '  to  Iniild  a  l^attleship  irum  keel  to 
aerial  in  all  it.,  comji'      detail  entirely  hy  women's  lal)or,' 

The  Organization  and  Work  cf  the  Briti.sh  Government 
IN  Rel.\tion  to  Siiipbl'ildi?;g 

Priority  and  Price  Control  in  Sn\,  /  duslry  and  Shipbuilding 

Fn  the  heginninj,'  of  the  war  the  Bri    ,;i  followed  their  national 
instinct  of  lettinjj  industry  alone  as  mtich  as  possihle.  hut  the 

'  '^!iipbuilder«    fr.m   ■Mme   parts   uf    England   think   that   slatcnirnt   mtich 
li.ii  ^•,i..mg  (or  tin  I     Jistrict*. 


i^- 


-il       iNiLri:\cE  OF  Tin;  r.riEAT  war  i  pox  riiipriNC 

IcRic  of  events  forced  a  rapidly  increasing  <';evelopment  of  gov- 
ernment control. 

The  first  step  was  to  commandeer  the  yards  for  work  on  war- 
ships. Init  the  development  of  munitions  industries  at  the  same 
•ime  promptly  produced  a  shortage  of  steel.  To  get  around  this 
trouljle  the  government,  through  the  Ministry  of  Munitions,  had 
to  take  charge  of  the  steel  industry  Ix.th  for  price  fixing  and  <lis- 
trihution  of  product,  and  the  shipbuilding  industry  irom  start  to 
Imish  has  had  to  struggle  with  an  almost  continual  shortage  of 
supplies.  The  distribution  of  materials  brought  inevitably  a 
higher  control  of  industry- -the  deciding  of  what  should  lie  done 
and  what  left  undone.  Thus  the  government  very  early  in  the 
war  had  to  decide  that  this  ship  or  class  of  ships  rather  than 
that  other  class  should  be  comi)leted.  The  prewar  individualistic 
shipbuilder  would  naturally  be  aggrieved  at  this,  and  it  is  also 
natural  that  certain  inefficie.icies  and  occasional  grievous  mis- 
takes should  occur. 

On  several  occasions,  when  the  authorities  have  decided  to 
construct  oil-tank  steamers,  builders  have  been  ordered  so 
as  to  expedite  delivery,  to  utilize  whatever  was  on  the  stocks 
But  It  has  happened  more  than  once  that  the  particular  gov- 
ernment o'hcial  in  charge,  being  ignorant,  of  course,  of  the 
mmutuc  of  shipbuilding,  hnf  naturallv  enough  assumed  that 
the  more  forward  the  condition  of  anv  boat  the  speedier  her 
readiness  for  any  service.  And  so  in  one  or  two  instances 
we  bnd  where  two  sister  ^hips  were  being  constructed  (,n 
adjacent  berths  for  general  cargo  carrving  purposes,  and 
one  was  all  framed  and  parti v  plated,  and  the  other  had 
only  her  keel  laid,  the  Admiraltv  (mleml  the  former  to  bt 
converted  into  an  oil-tanker,  which  necessitated  her  Ijeing 
stripped  down  to  the  keel;  while  if  the  other  had  been  requi- 
sitioned the  nation  wcnild  have  been  saved  time,  labor  and 
expense.' 

Out  of  this  necessary  practice  of  control  and  prioritv  orders 
there  ro.se  a  long  discussion  concerning  the  fulfiinieni  of  uncom- 


'  /■', 


airplay.  I'ebruary  17,  1916,  p.  26i. 


SHIPBUILDING    IN    THE    fNITED    KINGDOM  2r.5 

pleted  prewar  contracts  for  merchant  ships  which  liad  hecn  set 
asule  en  the  commandeering  of  the  yards  for  gcnernment  work, 
he  merchant  contracts  had  no  war  clause  in  them.     Some  .,f 
limn  were  ma.le  on  the  l.asis  of  alwut  £.i  per  ton  ilead-weij-ht  and 
when  builders  could  resume  work  on  them  in  II) It;  materials  and 
labor  had  gone  up  to  a  point  where  they  cost  much  more  than 
that,  and  new  contracts  amid  be  easily  had  at  tlJ  per  ton      The 
government,  h-.wever.  refused  to  compensate  the  shipyards  for 
any  difference  in  cost  on  the  unfinished  contracts,  although  the 
Admiralty  ■  ni  some  cases  p.vd  the  owners  damages  when  the 
work  on   their  ships  had  been   stopped   by  government  order. 
Ihe  dilemma  was  settled  by  owners  in  at  least  \K,  per  cent  of  the 
cases  pay  ing  the  difference  in  cost.^'  as  they  could  well  afford  to 
do  owing  to  the  enormous  freights  which  then  prevailed  on  such 
ships  as  were  free  to  get  the  competitive  rate. 

The  Shipbuilding  Dictator 

It  was  natural  that  the  various  authorities  having  control  of 
something  in  the  shipbuilding  field  should  make  conflicts  indi- 
cating a  need  for  greater  harmonizing  of  effort.     .Accordinj-lv 
m  the  autumn  of  1»1C,  we  find  so  authoritative  a  journal  as  the 
^''^frpool  Journal  of  Commerce  calling  for  a  shipping  dictator 
This  call  was  inspired  by  Lloyd's  Register  returns  for  shipbuild- 
ing which  showed  that  for  the  quarter  ending  September  .•!.). 
IJK.  the  vessels  completed  in  the  United  Kingdom  amounted  to 
the  alarming  tota   of  but  71.000  tons  gross,  while  for  the  nine 
months  there  had  l,een  but  200.000  tons,  compared  with  a  normal 
output  o   at  least  a  million  tons,  and  with  losses  which  this  paper 
estimated  as  follows :  ^  ^ 

For  the  period  of  the  war  to  date: 

1.  Hindrance  of  new  construction ^\7cJm 

2.  Uar    destruction S2n'nn^ 

3.  Excessive    deprecation ...'.■.'...■.'.'     1,'wo'ow 

Total    '■ 

4,220.000 

7Sr^"!n^'7^:i:^i:^'t,^\  7.>!^1'Vc«"'l  «°"^  "P  so  per  cent  and  labor 
';'>i/,l''«y-  >larcli  16.  19'.o,  p  44f. 
Ib,d.,  October  12,  1916,  p.  523. 


.':.« 


I.NKI.rrXCF    OK    TIIF    GREAT    WAR    IPOX    SiriPPINC, 


In  spite  «)f  admitteil  difficulties  it  is  hard  for  the  ..msider 
to  l)elieve  that  this  can  not  lie  improved,  while  ^-veryoiic 
claiming  any  Rentral  knowledge  of  the  situation  is  'well 
aware  that  many  more  ships  could  Ik;  turned  out  without 
at  all  interfering  with  the  more  ur},'cnt  requirements  of  any 
other  section  of  our  lighting  machinery. 

Claims  on  the  manhood  of  the  country  and  on  the  outpw 
of  material  tor  more  urgent  purposes  arc  admitted  :  there  is 
no  complaint  on  this  account.  What  is  not  admittcJ  is  that 
:♦  is  necessary  t(j  employ  a  constantly  increasing  multitude  i»f 
officials  to  stitle  the  hest  eff(,rts  of  shiphuilders  and  appar- 
ently t<i  i  -re  that  what  available  labor  and  material  there 
IS  will  I,  'ed.     The  shipyanls  of  the  country,  and  the 

'I'.pplies  (  .  oor  and  material  they  so  urgently  require  are 
being  wasted,  at  a  most  critical  period  of  our  histoiv,  by 
the  grip  of  officialdom. 

rile  complaints  against  the  existing  system  or  rather  mul- 
tiplicitv  of  systems  each  possessing  its  own  little  tin  head, 
are  universal.  The  shipbuilders  have  been  governed  by  a 
sense  of  loyalty  and  a  desire  to  do  all  that  is  possible,  but 
there  is  ;.  limit  to  what  can  l)c  borne  in  silence.  The  ship- 
building  industry  needs  one  thing  to  put  it  right,  namely, 
an  autocrat,  one  strong  man  to  govern  everything;  to  see 
that  the  available  supplies  are  not  frittered  awav;  to  insure 
that  the  mr\ri  who  can  best  build  big  ships  is  given  big  ships 
to  build,  and  not  loy  .<hips;  in  general,  to  arrange  things  on 
a  sensible  basis  ai.d  prevent  every  official  suddenly  possessed 
of  tempc^rary  power  from  overemphasizing  his  own  rer|uire- 
ments  ami  upsetting  everything  el.se.    .    .    . 

The  post  of  dictator  is  not  difficult  to  fill.  What  is  re- 
quired is  r.n  individual  who  is  intimate  with  the  shipbuilding 
mdustry,  and  who>e  career  is  a  guarantee  of  strength  of 
character,  soundness  of  judgment  and  outstanding  ability.' 

The  dictator  came  December  1.  with  i  change  in  government,  and 
the  apix.intment  of  Shipping  Tontroller  Sir  Joseph  Maclay,  who 
was  heralded  as  the  desired  practical  man,  and  has  since  been 
so  recognized.  Within  a  month  he  appointed  an  expert  com- 
mittee 


'  I.ifcrf'ool  Jounuil   of  C'wm.'rcc   ciuoted    ii 
1916.  p.  421, 


.Udriiii-   KcviiTx'.   Decemiicr, 


SlIIPUlll.niNC    IN    Tin:    INITKD    KI\(.iM)M 


con.«istinj(  nf  leailin^;  >liipbuilders  ami  fii);ii»etrs,  to  advise 
him  on  all  matters  connertetl  \vif!i  tiie  acceleration  of  mer- 
chant ships  iiuw  under  construction  and  Hearing'  completion, 
and  the  general  administration  nf  a  new  merchant  >hiii- 
buildint;  pm^ram.  Thi^  is  a  matter  of  the  lir'.t  importance. 
Than  the  men  chosen,  a  better  or  nion-  capable  list  could  not 
have  been  selected.  I'hey  represeiit  the  Shipbuilding?  Em- 
ployers" I'ederation.  the  Engineering  Employer-*'  lederation, 
the  Board  of  Trade,  Lloyd's  Register,  and  the  <"lyde  and 
Northeast  (nast  local  employers'  associations  in  shipbuildinjf 
and  engineering,  and  their  esperience  and  technical  knowl- 
edge arc  practically  unlimited:  and  there  Iwing  behind  them 
the  driving  force  of  the  Shipping  ("cntroller  himself,  and 
behind  him  the  new  government,  we  should  .soon  be  hearinn; 
of  things  done.' 

Tlir  Standardized  h'abricatcd  Ship 
The  new  controller  promptly  started  in  to  apply  the  idea  of 
standardization  by  letting  contracts  for  standard  ships  for  gov- 
ernment account. 

The  government  has  issued  sjwcifications  {nr  a  number  of 
cargo  steamers  (jf  the  single-deck  type,  tu  carry  ><,()00  to 
10.000  tons  dead-weight,  which  are  to  be  as  sifnple  and 
inexpensive  in  design  as  pf)ssible,  in  order  that  thtv  can  \j€ 
turned  out  quickly.  The  hull.;  and  machinery  are  to  be 
standardized  and  the  vessels  are  to  ha>  e  priority  in  construc- 
tion. These  specitications  have  been  in  the  hands  of  the 
builders  for  some  little  time,  and  already,  it  is  understood, 
orders  for  some  2i>  ships  have  been  placed  >>n  the  Clyde,  and 
now  a  like  number  are  in  process  of  l)eing  contracted  for 
on  the  Xortheast  L'oast  and  elsewhere  Before  long  it  is 
estimated  that  40  to  .">("  of  these  vessels  will  be  in  hand  and, 
as  nothing  is  to  stand  in  the  way  of  their  construction,  early 
delivery  is  c.-<])ected. 

.As  completed,  the  vessel-  will  be  taken  over  by  the  -\d- 
miralty  and  engaged  in  trade  essential  to  the  nation,  chiefly 
grain  and  food  carrying.  After  the  war  is  over  the  vessels 
will  be  offered  tor  sale  to  private  owners,  and  when  that 
time  comes  they  are  certain  to  tind  ready  buyers." 

'  Fairpias.  January  4,  ly!7.  p.  22. 

"■  Lloyd's  ll'cckty,  January  19,   1917,  p.  7. 


-I'*       iNn.fKNcF:  OK   rill   grkat  war      pov  siin>riN-r; 

This  process  of  statu lanlizatjnn  which  uns  discussed  at  IctiRth  in 
ih*  !ast  cha;>tcr  anmsed  cnnsideraHf  opposition.     Each  luiildcr 
AdMtd  to  follow  his  .)wn  standard  and  duphvate  his  last  good 
"hxp  rather  than  change  over  to  th«  national  stan(lar<l,  which  for 
ivery  maker  nivuKcd  s<in>r  readjustment.     lUit.  fortunately,  the 
Shipi)in^  Comroller  had  his  wav.  commandcerinjf  fur  hi^  staml- 
ardized   ships   "  evers    availaUe   U-rth   in   the   Kinj^dom."  '      He 
>\a>  sfK>n  advertisiiij^r  -   t.;r  enginwrint;  nrms  anywhere  in  the 
I  nitcd  Kingd.iu  imi  usually  enjja«ed  m  huildintr  marine  engines, 
uho  oaild  undertake  this  class  of  work.      Ihe  marine  engine 
shortage  had  lieeii  acute  for  a  year,'     As  a  result  of  the  stand- 
anli/.ifion  policy,  plants  in  inland  cities  like  Hirniingiiani  which 
had  ha.I  little  t...  do  with  shipbuilding,  but  had  Iniilt  engim-,  were 
soon  building  marine  engines.    Owing  to  starxlard  design^  an  en- 
gine made  anywhere  could  k-  sv\  ung  into  the  hold  of  a  ship  in  al- 
most any  yard.  By  November  a  half  million  ton>  of  these  standard 
ships  uerc  under  way,  another  halt  million  under  contract,  and 
the  first,  a  batch  of  seven,  had  gone  to  sea.    While  the  opponents 
of  the  government  policy  objected  to  the  nunii)er  of  changes  in 
the  dcMgn,*  and  opposition  was  chiefly  based  on  the  shon  view 
of  a  few  months  rather  than  the  longer  view  of  a  few  years,  the 
consensus  of  well  informed  opinion  now  approves  of  the  stand- 
ardization plan.-'     It  was  really  but  an  enlarged  application  of 

'  Fairpiay,  .March  8.  1917. 
'  Ibid..  .April  19,  1917,  p.  hA. 
'  ll>:d..  .\'ovcmtK;r  23.  ]')](' 

m„rh"f^'h!  'fT  T''"'  ^I'ip^u'lders  have  told  mc.  the  first  model  left  very 
much  to  be  desired  End  thr  alt.ratio.w  durinK  construction  have  been  so 
numerous  that^  but  for  the  ..ict  that  the  controller  had  the  Defense  of  the 
Realm  Act  behmd  h,m.  some-  Imil.Urs  would  have  refused  to  «o  o,  with 
the  contract  imti  the  minds  of  the  authorities  were  made  up  as  to  what  wa 
re.-,lly  wanted,  lor  instance  fancy  any  shipowner  orderinR  an  ,rd  narv 
cargo  steamer  and  then,  wlun  she  was  well  under  wav.  informinRth  ■ 
but  ders  that  she  mu^t  be  so  built  as  to  carry  an  oil  cargo'    ' 

he  h,n''l,"JoX'''«"  "^=..S'''W."'f'  Controller  had  ordered  the  standard  ships  to 
be  built  to  the  same  dimensions,  but  on  the  Isherwood  System  and  no    the 

m      ''"'jm'';  '^P*"'  ^";'  ''^''  "*'•''  ""■  ^^'^'•-  ■■""«""»  "f  hull  steel    instead  of 

«  hufi;t^8^'s0?)','o,^  %"'  r""!'  '<'"\'l-a''-^''-''«''''  ''^'  co"'d  have  secured 
'  ,,i  ""  '^^■p^  '""s  dead-weighi      i  Iutirf>l(n\  .Mav  3.  1917  n  733  ) 

w.=         "."i    V"''  '  "^'""'''S";  T'  '"'■■'^-  howevef,  in  which  builders'  capacity 

( A^,-,"j^r;"\£-  S"wr'"''''  '•'  '"'-'"^  "^^"^^  '^"^^ "'  ^•^'"  >"  ^^^  --^"'^ 
.  JxS'^Jc^i;  i:^,  ;::t,  ^^r-  ""'"'"^  --  -"^  ^"»-''  "> «"-"  work 


SHipnriLntNG  in  the  tnitki.  ki.noixjm 


2.'>0 


the  principle  whereby  the  \ards  of  a  given  district  pooled  their 
labor.  To  qiicte  the  words  of  Mr.  Runciman,  President  mi  the 
Board  nf  Trade: 

Larpc  groups  of  yards  and  engine  shops  must  In;  treated  as 
one  large  establishment,  within  uhich  labor  and  all  other 
resources  must  l)e  capable  of  Iwing  moved  alxmt  from  hour 
to  hour  as  work  may  require  Hut  liehind  shipbuilding  th«re 
is  the  even  more  difficult  questic«j  of  material.-.  Tht  urov- 
ernmcni  are  bringing  Ivick  skilled  steel-workers  from  the 
army,  extending  their  -leel  works  and  rolhng  mills,  relight- 
ing blown-,  lut  blast  furnaces,  and  making  such  arrangwtwnts 
as  will,  they  hope,  provide  "enough  fi-r  their  nrqtitremems 
and  somethmg  to  sjjare  for  Italy  and  France."  ' 

The  District  Speeding  up  Committees 

As  evidence  of  the  economies  of  this  system,  as  applied  in 
England,  it  may  l)e  pointed  out  that  they  were  able  to  reduce 
the  numlwr  of  sizes  of  sections  that  had  to  l)e  rolled  for  ship 
framing  from  4(»  to  less  than  10.  Some  builders  were  wedded 
to  a  frame  !>/!(;  inch  thick,  others  lt)/lti  inch  {'>/^),  others 
11/ Ki  inch,  differences  so  small  as  to  lie  difficult  to  measure,  but 
as  Ixithersome  to  make  as  any  differences.  The  Committee  on 
Standards  ( fortunately  there  had  been  a  Parliamentary  Commit- 
tee on  Standards  i)efore  the  war)  ordered  them  made  to  standard 
size,  which  as  aljove  mentioneil  reduced  the  number  of  angle 
sections  from  10  to  less  tha;.  10.  It  may  reallv  be  said  that  there 
was  more  -.tandardization  of  ship  sections  than  standardization  of 
ships,  although  seven  standard  types  of  ships  were  built,  from 
A  to  {;.  running  from  2..-.00  to  1(».000  tons  dead-weight.  \o 
liners  were  built,  becau.se  it  is  three  or  four  times  as  much 
trouble  to  build  a  liner  with  passenger  accommodations  as  it  is 
to  build  a  single-deck  tramp,  which  is  really  a  great  floating  iron 
box  with  some  machinery  in  one  end  and  minimum  housing 
accommcKlations  in  the  other. 

The  standardization  of  sections  to  be  used  all  over  the  United 

'  I'airflay.   \ovembcr  23,   1916.   p.   7A0. 


L'f.O 


IMl.l  T.Nl  I     (11      rill     (;i<l  AT    WAR    II'OX    SIIIPPINT, 


Kinjjdom  Krcntly  increased  the  capacity  for  output  of  material. 
Thus  in  the  nld  days  a  rolling  mill  wouKl  get  an  order  tor  :*<M> 
tons  oi  angles,  ml!  thcin,  and  then  spend  1l'  hours  resetting  the 
rolls.  Now  tlie  orders  go  to  the  Admiralty  Overseas  Steel  Super- 
intendent. He  distributes  them  to  the  rolling  mill.s  of  the  King- 
dom. One  mill  is  put  to  rolling  one  size  and  keeps  it  up  until 
the  machinery  needs  to  lie  repaired.  With  these  definite  methods. 
Ill  combination  with  rigid  priority  order  numbers,  the  British  ship- 
builder can  once  more  have  some  certainty  as  to  when  he  will 
get  his  material. 

In  the  alter 'i)t  to  further  coordinate  the  work,  the  First  Lord 
of  the  .Xdniiraity  appointed  in  March  '  committees  in  various 
-.hii)building  centers  for  the  sole  purpose  of  e.xpediting  shiplmild- 
ing  both  naval  and  merchant.  The  district  committee  of  the  Clyde 
and  Kast  Coast,  Scotland,  consisted  of  three  persons,  of  whom  one 
u;''  assistant  director  of  shipyard  labor,  another  a  director  of 
the  iLchniral  section  of  the  shipyard  labor  department,  and  the 
third  an  experienced  shiplniilder. 

Royal  Patronage 

111  the  attempt  to  put  enthusiasm  into  shipbuilders  of  all  classes, 
but  especially  the  merchant  shipbuilder,  the  British  pet  device  of 
royal  patronage  \\a>  not  forgotten.  In  Septeml)er.  HUT,  poor 
King  (ieorge  put  in  four  wear\  days  in  the  Clyde  yards,  osten- 
tatiously neglecting  warships  for  the  first  time,  but  busily  climb- 
ing over  tramps,  tugs,  barges.  dredge>  in  \ard  after  yard.  Two 
months  later  he  "  displayed  peculiar  interest,"  in  food  storing, 
fo(,d  handling  and  shipbuilding  facilities  in  the  port  of  London. 

Adminilty.   ll\ir  O frier  and  Ministry  of  Shipping  Combine  on 

Btiildiitti  Control  and  Start  Corernment  Plants 

in  .\L-iy,  I!tI7.  came  another  attempt  to  consolidate  and  utilize 

shipbr-ldiiij,'  resources  t.i  the  best  advantage.     The  .Admiralty. 

trying  ti.  duplicate  the  organization  which  had  supplied  the  army 

Uoycfs  If.-ckly.  Marcli  oO.  1^17.  p.  S. 


i.72Fr1^'' 


I'tJi'. 


SlllPBl-ILDING    IX    Tlir,    IMTEl)    KINGDOM 


■2>\\ 


with  munitions,  ImHiRht  all  the  shipbuildinj,'  matters  under  one 
authority.  piacinR  Sir  F-:ric  Cieddes  '  j,,  control  ni  the  shipi)uilditi^' 
xyork  of  the  Admiralty,  the  War  Otf.ce.  and  the  .Ministry  of 
Shipping.-  I'or  a  few  months  .Sir  ilric  was  iiusy  with  the 
cstal>lishment  of  the  standardized  ship  program  and  tlu-n  he  made 
an  announcement  of  the  governmenfs  intention  of  huildin;,'  and 
operating  government  owned  plants,  which  once  more  si-i  the 
-hiphuilding  world  into  a  huzzing  olijecting  discussion.'  Ship- 
iniilders  pointed  out  that  nearly  every  shipyard  in  the  Lnited 
Kingdom  had  increased  its  facilities  during  the  war.*  Imt 
example.  Harlan  &  Wolf  at  one  time  added  II  acres  tr  their 
Belfast  yard.  It  was  also  pointed  out  that  almost  e\ery  yanl 
in  the  country  was  short  of  labor,  that  they  were  mostly  short 
of  materials,  and  if  new  facilities  were  wanted  each  vard  could 
he  further  enlarged.  Therefore,  why  the  announcement  uf  Sir 
Eric  in  his  first  speech  a;  First  Lord  of  the  .Kdmiralty: 

We  have  decided  that  four  (later  reduced  to  thre.  »  new 
national  yards  at  least  will  he  necessary,  and  in  this  we  are 
following  the  precedent  so  successfully  applied,  and  so 
courageously  carried  through,  in  the  case  of  the  Ministrv 
of  Munitions  two  \(ars  ago  in  their  national  factories." 

The  government  stated  that  by  the  time  the  new  yards  were  built 
they  hoped  to  be  able  to  make  enough  steel  for  them  to  use  and 
to  have  enough  l.bor  trained  up.  with  perhaps  the  assistance  of 
some  foremen  from  the  old  yards,  to  rur  the  new  plants."  To 
the  amazement  of  the  shipbuildinc;  world  the  locations  when  an- 
nounced were  not  in  one  of  the  old  centers,  but  in  a  new  one  on 

•  The  shipbtiiiders  thought  this  was  a  great  joke  because  Sir  Fric  was  a 

railroad  administrator  who  happc-ned  to  have  had  some  American  exTer  ence 

H«L"'"-ir  '^"^  ""J  ^PP'y-  ^°''  ^''  »'•'  ^■=»''  °"^-  of  higher  administration 

sl-  esSIE.'  In^I?"''  ^^K''"'""""/  <  S=«=  discussions  of  ^rsonnel  of  United 
>t,.>es  Shipping  Board  m  next  chapter.) 

-  J.hyd's  ircckh,  Mav   18.   1917,  p    S 
'Shipbuilder.  December.   1917 
July  26!"[9l'6°*'"'''"^  capacity  has  been  enormously  increased."     {Fairway, 
f-airplay.  November  8,  1917,  p.  777. 
"  llnd..  November  22.  1917. 


2<!2  INFLUENCE    OF    TIIK    CRKAT    WAR    rPON    SHIPPING 

the  River  Severn.  They  were  to  have  thirty-five  berths,  and  uere 
located 

(1 )    At  Chepstow,  at  the  mouth  of  the  Wye. 

(-')  .At  Portbury.  near  I'ortisliead.  near  the  month  of  the 
Avon;  and 

(■1)  At  heachlcy.  a  mile  and  a  half  cast  of  Chei)>tow.  on  the 
banks  of  the  Severn.' 

The  cost  was  to  be  t.'J.MOO.OOO.  Work  was  oroceeding  on  them 
by  January  1  and  they  were  expected  to  have  much  inHuencc 
during  the  year  lids.  There  was  great  industrial  activity  in 
the  district  as  a  result  of  new  plants  lieing  located  there. 

These  new  plants  were  of  cuirse  to  Ix-  occupu-d  with  the 
standard  ships  fabricated  from  pieces  prepared  with  the  greatest 
possible  simplicity. 

The  vessels  built  will  Iw  tlie  plainest  of  plain  structures;  in 
shape  they  will  dispense  nlmost  wholly  with  the  bending  of 
frames  and  plates.  They  will  be  compo.sed  (jf  a  remarkably 
small  number  of  sections,  and  all  the  frames,  plates,  angles, 
and  bars  will  be  manufactured  to  sizes  at  specified  steel 
works,  and  "  assembled  "'  at  the  yards  by  "  unskilled  "  labor 
(composed  largely  of  prisoners  of  war),  working  under  the 
direction  of  leading  hands  and  foremen  drawn  from  private 
establishments  or  from  the  national  dockyards.^ 

Hrit\in"s  SiHPBuiLuiNt;  Problem  a^d  Prospects 

In  a  parliamentary  discussion.  March  20,  IIUS.  Sir  Eric 
Gedde>  ainu)nnced  a  new  jMjlicy  of  frankness  with  regard  to  sub- 
marine loses,  which  he  said  during  the  previous  twelve  months 
had  lK;en  C.iKtO.uoo  tons  rather  than  the  '.», 500.000  tons  claimed 
by  the  (iermans.  He  showed  that  British  shipbuilding  during 
the  last  (luarters  of  each  of  the  three  previous  years  had  been: 

J'-'l?  4i.l""''  tons 

|2it' -'l.?.0(X)     •• 

19''   4J0,000     " 

'Lloyd's    /r,v/.'/v,    Nmunbcr    16,    1017.    p.   S 
'  Glasgow  //,  -,i.'<y.  Utcciiibi.T  J9.  1917,  p.  JO, 


SlIIPUlILUIVr.    IN    THE    IVITED    KIVGDOM  203 

nn.|  that  durint;  the  latter  quarter  .,f  1!M7  forei.M,  ronstn,cti..„ 
ha.    I^ren  :.l...ooo  ton.  makioR  a  total  ..mput  f..r  the  .,uarter  nr 
. ...    < Cns.  while  the  losse.  during  the  same  per.o.l  had  l.een 

.-<».......,,.,„,.  ,he  hnvcst  since  the  intensive   suhmarine  war 

lK-«.m      I  Ic  puuited  out  that  the  Ali.e.  v.ere  within  lOo.ooo  ,.,„, 
a  month  of  making  good  their  lo>,es  and  were  replacing  75  per 
cent  of  ,l,e,r  l.,*t  tonnage.     L'nfortunately.  however.  Sir  I'ric 
had  u,  adnnt  that  H.itish  output  during  the  first  months  of  ll.is 
had  l,ecn  unsatisfactory.     It  went  down  almost  exactly  a  third 
tro.n  k'o.oon  ,„ns  in  three  months.  October  to  December    l!»i: 
tn  i-n.imo  tons  ni  four  months.  January  to  April.  li.Is'    This 
was  due  n,  part  to  the  recurrence  of  labor  .lilT.vultits.  an.l  partly 
to  the  enormous  increase  of  repair  work,  which  ha.I  increa,ed  HO 
IKT  cent  between  August.  1!.17.  and  February.  li»l>  '    The  dock 
ing  of  Hrmsh  naval  craft  for  repairs  in  the  last  .,uaiter  of  11. 1 7 
was  tentul.I  ,hat  of  peace  times,  amounting  to  mor.-  than  1  0(.o 
sh.p.  .month.     The  men  so  employe.l  might  haye  produce.l  a 
hal    mdbun  tons  of  n.erchant  ships  if  they  had  bc-n  enga.-ed  on 
that  w.,rk.     I  wo  weeks  earlier  Sir  Eric  had  state!  tnat  repairs  ^ 
were  ..nkm,.  more  men  than  new  merchant  ship  con,truction.  and 
at  the  same  tune  S,r  John  Ellerman.  controlling  owner  of  several 
■teamshjp  hr.es.  declared  his  belief  that  the  whole  output  of  ship- 
P"'.  m  Hr,t.yn  since  the  beginning  of  the  war  was  not  enough  to 
replace  the  losses  by  marine  causes  alone.      It  is  undoubtedly 
n,e  that  the  runmng  of  vessels  on  irregular  courses,  without 
1-:.  ts.  has  resulte<l  ,n  a  great  increase  in  loss  bv  accident  an.l 
wreck,    .numerous  torpedoed  ships  staggered  into 'the  British  dry 
<I"C.<s  fur  repairs.     Repair  facilities  have  therefore  become  as 
scarce  as  steel  was  in  101.5.  and  have  had  to  1^  apportioned  out 
'••  the  same  wa>-.     If  a  ship  is  injured,  a  local  port  committee 
Z7TV'  '.      ''?^  -T.eyor  cf  Lloyd's  Register  of  Shipping 
and  the  Board  ot  Trade  Surveyor,  decide  what  shall  be  .ione  t! 


204 


IN     l.fENi       or    TMK   CRKAT    WAK    I  I'oX    tirrPIMNu 


the  sliiji.  The  inuicr  ha*  mnhing  to  -w  atwut  it  if  rhcy  tell 
liini  t  .  repair  her  litujxtrarily  aitj  lihsp  ,  '  mg,  he  rnuM  dc  wi.  If 
they  order  thorough  repairs,  hv  nuut  etiinply,  hi^  own  opinion 
to  the  cniitrary  iiUwith^taiuli  ig. 

Tlie  enormous  incrcane  of  rq)air  rt,.f'    .u  British  yanls,  Ci>m 
bined  with  the  (.ieriii.ui  nlTensive  and  i!tt-  call  f.,r  more  men.  has 
put  Hritaiii  into  a    .ri.-iis  di'mima  whi.  U  may  >et  vimHcat.-  the 
prophets  ot  evil  who  prctlictcd  that  there  wnulU  be  no  need  tor 
the  government  -.hipyards 

The  slump  in  output  at  thr  Iwginning  of  1!»1H  emphasized  labor 
.shortage.  To  meet  this  I.!,,yd  (ieor^e  promised  to  i)ring  l)ack 
LH».(MMi  expert  shipbuilders  from  the  army,  hut  the  attempt  to 
find  thctn  in  the  army  in  places  ulu-re  they  couhl  Ise  spared, 
promi.sed  .so  to  injure  the  militars  units  that  but  J.tMMj  men  came. 
March  I'O.  liMs,  |Joyd  (ienrj-e.  replying  to  criticisms  in  Par- 
liament, said  that  shipbuilding  had  not  stopped  for  lack  oi  steel 
or  steel  plates  but  that  the  .nmculty  hid  Inren  largely  one  of  lalxjr. 
He  then  went  on  to  state  that  every  man  in  the  home  service 
skilled  in  shipbuilding,  had  already  i)cen  taken  from  the  army. 
But  when  it  was  demanded  that  2(i,t»0()  men  should  Iw  with- 
drawn lonibly  from  the  HuroiKaTi  field,  it  raised  a  very  .serious 
question  Many  of  them  were  assigned  to  the  manning  of  bat- 
teries, and  were  the  mainstay  of  i..mplete  organizations. 

Thus  England  with  unsatisfactory  output  of  tonnage  faced 
the  p.iralyzing  dilemma  presented  by  the  German  advance  in 
!■  landers  and  the  need  for  ship^  W  here  shouki  she  put  the  men  ? 
Should  she  increase  the  shipbuilding  forces  which  she  so  impera- 
luely  nee<led?  It  is  natural  that  they  have  frankly  admitted 
lor  many  months  that  .\merica  was  the  only  hope  of  getting  suf- 
licient  tonnage  to  meet  the  .Allied  emergency.  Fortunately,  most 
fortunately.  .America  is  now  getting  down  to  shipbuilding'in  fair 
earnest.  [nvciuions  have  embarrassed  the  submarine  and  re- 
duced its  efticiency  so  that  the  latest  return^  f..r  the  month  of 
April  >huw  that  for  the  fir.st  time  in  many  munths.  w'.rl.I  launch- 
ings  surpassed  world  sinkings. 


CHAPTER  X 
Shipbuilding- in  the  United  States,  1914  to  May,  1918 

Two   Periols  of  Shipbuilding 

Merchant  shipbuilding  in  the  United  States  diirinjj  the  war 
falls  into  two  very  distinct  epochs:  the  first,  that  during  which 
there  was  private  building  only,  the  ships  being  built  for  private 
parties  vi  any  nationality.  This  epoch  lasted  from  the  beginning 
of  the  war  down  to  the  middle  of  lit  17,  when  the  second  epoch 
began  with  the  United  States  Government,  through  the  United 
States  Shipping  Board,  starting  the  firm  policy  of  control  of 
private  shipyards,  even  to  the  point  of  recjuisitioning  all  un- 
finishetl  ships,  and  also  starting  in  upon  the  [ilan  of  building  gov- 
ernment shipyards  for  operation  on  government  account. 

Tin:   Kkvival  of  Btilding   Early  ix  the  War 

The  war  opened  in  a  period  when  the  unusual  dullness  of  the 
shipping  business  had  been  emphatically  passed  on  to  the  ship- 
yards .;i  the  United  States  as  well  as  Europe.  In  October.  10]  I. 
Shipping  Illustrated  said  that  few  of  our  leading  yards  were 
able  to  earn  anything  over  fixed  charges  and  interest.  This 
could  not.  however,  be  attributed  to  the  Iieavy  admission  of 
foreign  vessels  to  American  registry  for  that  fact  hau  no  in- 
fluence un  the  world's  freight  market,  as  it  in  nowLe  increased 
the  total  available  tonnage.  Nor  did  it  have  any  influence  on 
the  .American  yards  because  for  years  they  had  had  almost 
nothing  to  do  with  the  building  for  the  world's  overseas  trade. 
Later  in  the  same  month  Lloyd's  Weekly  (October  ->.'},  lUU), 
London,  predicted  that : 

While  the  war  lasts  there  is  unlikelv  to  be  any  demand 
lor  new  ocean-gomg  cargo  vessels,   so  perplexing  is  the 


SHIPBUILDING    IN    THE    UNITED   STATES,    1914    TO    1918       2«T 

trade  outlook   for  even  the  shrewdest  shipowners 
The  niost  promimnt   feature  of  the   British  shipbuilding- 
situation  has  been  lor  some  time  the  absence  of  anv  con- 
siderable demand  for  true  cargo  boats  cf  the  ocean  wav- 
farnig  class.  ' 

Two  weeks  later  Fiurplay,  observing  the  rise  in  rates,  predicted 
a  rise  in  price  of  shipping,  and  told  of  one  British  shipyard  that 
was  beginninjr  to  lay  down  tramps  on  speculation  and'  was  de- 
clining to  make  definite  contracts  because  of  the  expectation  of 
higher  prices  before  the  ship  could  be  completed.  The  accuracy 
of  this  prophecy  was  abundantly  vindicated  bv  the  sudden  burst 
of  shipbuilding  prosperity  which  within  a  half  vc -r  had  reached 
to  every  corner  of  the  globe.  At  the  end  of  the  ne.xt  June,  the 
Marine  Rcvicii'  (July.  I!il5.  p.  2'>i)  said: 

rVosperity  so  long  denied  coast  shipbuilders  has  burst 
upon  them  on  a  scale  completely  exceeding  the  ni.jst  opti- 
mistic expectations  and  with  such  abruptness  as  to  render 
the  present  capacity  quite  inadequate  to  meet  the  demand 
From  Newport  Xews  to  Bath,  and  from  Los  Angeles  to 
Seattle  practically  every  berth  is  filled  with  a  new  bottom 
in  some  stage  of  construction,  ^yhile  many  more  craft  are 
under  contract  and  await  their  turn  on  the  blocks.  Since 
December  1,  it  is  ascertained  by  carefully  compiled  records, 
no  less  than  ;J5  new  merchant  vessels  of  good  size  have  been 
awarded  to  the  Atlantic  yards  alone,  aggregatini:  anoroxi- 
mately  200,000  gross  tons.  f^     n'    ■ 


The  Revolution  in  Ship  Price  and  the  Gre.^t  Boom  in 

Building 

This  coming  of  business  to  America,  for  America  was  now 
iieginning  to  build  for  Europe,  meant  complete  revolution  in 
ship  price.  Whereas  the  Marine  Rcriexi'  (October.  1!)14") 
pointed  out  that  a  certain  kind  of  ship  would  cost  $l'00,000  in 
the  United  Kingdom,  and  $:]00,000  in  the  United  States,  ten 
months  later  the  plight  of  British  shipyards  was  such  that  Fair- 
play  (August  20,  191.^)  reported  British  builders  only  willing 
to  conl.-act  for  delivery  in  twenty-three  months  and  at  prices 


^m 


208 


ISKI.IKMI.:    OF    THE    ,;rk.\T    WAR    IPOX    SHIPPINV. 


more  than  tho.c  prevailing  i„  the  Unite.'  States.  The  entire 
disappearance  of  .,I|  pr,,var  conditions  an.l  ,he  dumimnce  of 
war  costs  was  shown  by  the  fact  that  bv  the  middle  of  l!.l.! ' 
American  shipyards  were  Reltinjj  co.uracts  at  «14()  and  $1.-..  a 
on  whde  the  cost  of  Mritisl,  .hippin,.  twentyseven  months  be- 
fore had  m  a  number  of  cases  l^een  found  to  average  £5  l«s  7d 
per  ton  tor  cargo  boats.'  *^  lus.  *a. 


DIAGRAM    SHOWING    SHIPBUILDING    CAPACITY   nir    ttv,^,.., 

TONS  PER  VEAK  AT  ENH  OK  EACH    "a^^'iQU To  iS'^.^tt^VE''^ 

— brom  Marine  Review.  February,  1918. 

In  its  February  issue.  l!)l.i,  the  Marine  Rez-iew  published  a 
report  ot  a  survey  of  American  yards,  showing  that  thy  were 
booked  ,ar  ahead,  that  two  of  the  largest  Atlantic  vacls'wud 
not  prom.se  any  more  <leliveries  inside  of  two  vear!  and  X 
they  were  embarrassed   by   labor   shortage.      The  ;:xrmomi; 

'  Fairplay.  August  .31,  1916. 
Ibid..  May  14.  1914. 


*♦:% 


SHIPBUILDING    IN    THE    UNITED    STATES.    1!)U    TO    1918       260 

the  same  joi'rnal  reported  that  $100.()()0.000  of  new  capital 
had  pone  into  American  shipyards  in  the  first  eighteen  months 
of  the  war.  It  also  reported  that  most  yards  could,  if  neces- 
sary enlarge  their  capacity  from  ir*  to  (M)  per  cent  within  twelve 
months.  This  was  the  shipbuilders'  answer  to  the  congressional 
discussions  of  the  proposal  to  build  ships  with  government  money. 
Naturally,  however,  the  .American  shipbuilder  was  loath  to  put 
good  capital  into  an  mdustry  which  he  knew  was  a  strictly 
mushroom  industry,  namely,  the  building  for  foreign  owners, 
a  thing  which  under  normal  conditions  of  peace  he  had  not 
been  able  to  do  for  half  a  century  and  which  the  return  of  peace 
promised  to  promptly  take  away  from  him.  He  had  it  now, 
but  could  he  get  enough  money  out  of  it  while  it  lasted  to  pay 
reasonable  profits,  plus  principal,  plus  interest  ?  It  looked  doubt- 
ful with  the  Allies  constantly  declaring  that  each  year  would  be 
the  last  of  the  war.  Meanwhile  we  built  ships  with  all  speed 
and  the  British  lamented  the  novel  spectacle  of  America  build- 
ing liners  for  Clyde  owners. 

.She  is  building  a  lot  of  vessels  for  Norway,  and  some 
for  France,  but  it  does  seem  to  be  the  limit  that  she  should 
be  building  liners  for  Clyde  owners.' 

The  maternal  position  of  Britain  in  the  shipping  world  was 
shown  by  the  fact  that  most  of  these  new  vessels  were  built 
under  Lloyd's  survey,  which  organization  had  to  increase  its 
staff  of  surveyors  in  the  United  States  to  fifty  by  the  middle 
of  191(5.^  Shortly  after  this  one  important  American  shipyard 
received  reassurance  in  the  form  of  a  contract  to  build  for  a  cer- 
tain length  of  time  for  one  of  the  I)est  known  British  shipping 
companies  at  100  per  cent  profit.  A  single  bank  reported  han- 
dling $50,000,000  for  Norwegian  capitalists  buying  ships  in  the 
United  States.  Under  such  stimulation  as  this  it  is  easy  to  see 
why  the  industry  would  stretch  to  its  limit.  One  of  the  phases 
of  this  expansion  was  the  revival  of  the  decadent  industry  of 

'  Fairpla\.  April  27.  1916. 
'Ibid.,  July  13,  1916. 


-'.0         INKU-KNTK   OI-   T„E   C.UKAT    «  AH    (PON    SHIPPING 

U'ooden  sl.ip  l,„ilcli„,,  ,Wmh  indee.I  had  almost  Income  a  lost 


art 


Ir      ':':'!;/'  ^"'"'^■''  •-•"'  ^■■'"'!^:"^  *^  «^  '-J^  ^^e  famoul 
Clipper  ".liij.s  of  the  past  were  mole  ed  into  macnificenre 

have   l,een   rehabilitated  and   now   are  huJily  uSrom 
-smart  auxiliary  scho.MKrs.     (ihosts  of  .ships,  lo  riett 
•lecay  at  their  anchorages,  have  I.een  resurrecte f  rebui 
and  .,ent  once  tm.re  •  >  ply  the  ocean  hiphwavs  ' 

.A  year  aj;,,  the  hi.  iders  of  xvooden  ships  ,it  Xorth  Pacific 
•ards  were  practically  idle:  today  these  same  plant    are  en- 
joying a  period  o    activity  never  before  exper'^enced  i''    he 
estern  section  of  the  maritime  world.    _    .    h  is  nearlv 
.{years  since  the  last  large  wooden  sailing  schooner  "Jas 
built  on  the  west  coast.   ...  A  dozen  leaS  vears   durhie 
uhich  shipowne,    almost  faced  ban.ruptcv.  luXr  f  eSs 

bu  I<l,np  wooden  ships  ot  large  size  on  the  Pacific.  Xow 
It  IS  coming  again  into  its  own. 

In  a  brie  I  space  of  six  months,  over  1.1  large  new  wooden 
St-  :^Irds."""-^  '■'"'  ''^"  '^"^  '^""'^'^^5   from  NoS 

There  has  been  a  remarkable  demand  for  wooden  auxili- 
to         „ o.ooo   feet,  board  measure,  but  the  activitv  is  not 

T^t  '"  r  ""'^  ''r''^  "^  ^^"'•'^■-  ♦■"■■  i^  includes  St  e 
-steamships,  large  wooden  motorships.  and  smaller  gas  ves- 

Pedro  iTr-'  T  ""/''"  '""''  '■'■'^"^  X'ancouver  to  San 
Pedro  IS  crowded  with  construction  work  and  everv  few 
days  announcement  is  made  of  some  concern  being  incor- 
porated for  the  purpose  of  shipbuilding.  Xo  k,s  than 
eight  such  concerns  filed  articles  in  Washington  durin"  the 
last  sixty  days  of  the  year.'  """"s  me 

Shortage  of  Labor  and  Materials,  1014-191G 
The  expanding  industry  was  checked  bv  the  two  limits  of 
labor  shortage  and  material  shortage.     There  was  great  unrest 

■  •)f''j""r-  '^''' '•'''■■  ''I'hruary,  1917,  p.  43. 
I'M"  ,'J''"-"^'-y.  1M7.  pp.  63-64. 
Jl»d.,  lebruarK,  1917,  [>.  50. 


SHII'UIILOIXG    IN    TIIL    IWITED   STATES.    U»14    TO    IDIS       271 

in  labor  because  the  new  shipyards  took  lalwr  from  the  old.  and 
the  old  yards  took  labor  from  each  other,  and  workmen  sufferinfr 
from  undue  prosperity  l)(.j,'an  to  develop  the  inetTicicncy  th.it 
uMi.TJIy  rtsulis   fnmi  --uch  conditions.     Materials  were  ecpially 
ban!  tt)  Ret.     The  Marine  fii-tir.c  (Novemlier.  llUfl)  reported 
that  ship  plates  were  sold  up  for  the  next  ei^ht  mouths.  althouKh 
there  was  jjre.it  increase  in  the  output,  that  of  V,n:>  having  in- 
crease I  over  the  preceding  year  to  l,!Mto,()0(i  tons  from  l,.!(>o,()0() 
tons.     Some  of  the  ship  plates  were  II   icet  wide  and  required 
special  rulling  mills  to  make  them,  and  as  there  bad  l)een  no 
previous  demand   for  them,  the  steel  companies  were  slow  to 
enlarge  their  plants  for  this  product,  especially  as  it  required 
i:  great  deal  of  expense.     Shipyards  were  also  short  of  engines 
and  were  compelled  to  use  less  desirable  tyjjcs  than  had      .ui 
planned."     At  this  time  the  British  heralded   with  praise  our 
•'  icmarkable  work  "  in  shipbuilding  in  Baltimore  and  San  Fran- 
cisco.-    Five  months  later  the  same  journal  admitted  American 
leadership  in  speed  as  follows : 

A  .'i.i'fiO-tonner  was  launched  in  three  months  from  the 
laymg  of  tht  keel;  a  tanker  of  l(),i'(M)  tons  was  launched 
in  three  months  and  three  days;  while  similar  records  were 
made  with  other  vessels.  These  records  have  never  been 
approached  in  this  country  in  ordinary  practice.' 

The  Co.mixg  of  the  U.vited  States  Shipping  Board 

While  the  American  yards  were  booked  years  ahead  with 
orders,  and  were  months  behind  on  materials,  there  raged 
through  the  summer  of  lltlC  the  discussions  of  the  Shipping 
J'.oard  bill  which  liecame  a  law  in  September,  lf»U;.  and  then 
hung  as  a  factor  of  su-  pcnse  on  the  shipping  world  for  months 
before  the  Board  wai^  appointed,  and  caused  much  speculation 
as  to  what,  when  appointed,  it  could  and  would  do.  There  was 
not  a  shipbuilder  on  the  Shipping  Board  as  first  organized.     It  is 

'  Fairphix.  .\pril  19.  1917. 
'Ihid..  January  11,  1917,  p.  69. 
'  Ilnd..  JiiTic  7,  1917,  p.  <^)i7. 


272         INFLl'ENCK    OF    THE    ORKAT    WAR    UPOX    SHIPPING 

therefore  not  surprisinR  that  a*  it  had  to  Imild  siiips  it  had  rapid 
reorgam/ations.  It  went  through  two  e|K)ch*  in  Ics*  than  a  year 
and  IS  now  in  the  third.  The  first  e|KKh  may  Ix  called  the  epoch 
of  the  statesmen-men  of  wide  experience  and  Rcnerally  gmxl 
judgment,  men  capable  of  deddin^'  p.licv.  I,m  who  had  not  had 
experience  in  carrying  out  these  poi  The  second  epoch  wa^ 

that  of  the  routine,  scientific  mc  .e  naval  constructors  who 
knew  scientific  and  technical  m.  .rs.  hut  were  quite  inex|)eri- 
enccd  m  havmg  manufactures  according  to  these  plans  executed 
uith  great  spied.  The  thir.j  epoch  is  the  epoch  of  the  present, 
that  ot  the  administrative  men.  the  men  who  ,/„.  but  who  have 
never  had  much  opi)ortunity  f.  distinguish  themselves  in  science 
or  m  the  enunciation  of  national  policy,  but  who  have,  as  admin- 
istrators, done  things  and  dune  them  ([uicklv— the  epoch  of  Piez 
and  Schwab  and  the  experienced  shipbuilders. 

L>.n  the  uhole  the  career  of  the  Shipping  Board  stands  as  a 
clear  cut  example  of  the  great  importance  of  one  of  the  most 
lately  recognized  phases  of  scientific  management:  namely   the 
scientific  employment  of  men-the  getting  of  the  right  man  for 
the  work   in  hand.     At  present  the   President  of  the   United 
States  IS  one  of  the  largest  employment  managers  on  earth  even 
for  purely  industrial  matte -s.  yet  most  emplovment  managers  are 
more  free  than  he  to  think  of  appointmeMs  in  purelv  business 
terms.     Indefinite  numbers  of  people  with  influence  try  to  get 
positions    for   their   friends,    from   or   through   the    President, 
chiefly  because  these  persons  are  their  friends.     .All  this  is  hard 
for  a  I'resiileiit  or  any  one  else  to  resist.     Then,  too.  a  President 
IS  also  the  head  of  a  party  and  he  can  nut.  except  under  the 
most  unusual  circumstances,  entirelv  disregard  the  political  ele- 
ment even  when  he  lays  his  hand  to  economic  matters.     In  gen- 
eral the  President  is  the  victim  of  a  sy.stem.     From  the  very 
nature  ot  his  position  he  must  usually  keep  two  factors  in  mind 
industrial    and    political,    even    when    making    an    industrial 
appointment.     The  Shipping   Doar.l   illustrates   lx,th   phases  of 
the  presidential  position,  the  usual  or  political  and  the  unusual 
or  nonpohtical.     It  began  in   1010  in  times  of  peace    and  the 


SHJPBiriLDINtJ    IN    THK    LNITED   .STATES.    1014    TO    HMS      273 

rrcsidcnt  felt  it  nrccssary  to  annoutuc  the  (K.litics  of  the  mem- 
tiers.  By  the  end  of  11U7  after  some  months  of  war.  he  could 
and  did  appoint  without  regard  to  politics  and  without  their 
mention. 

After  the  war  was  on  the  Administration  had  the  advantaRc 
al.^o  of  much  patriotic  service.  Men  of  large  experience  and 
proved  ahdity  gave  their  services  to  the  Shipping  Board  for 
nothnig  or  for  what  was  to  them  a  pittance. 


Epoch  I.    The  Statesmen— January  to  July  24.  11H7 

The  first  Shipping  Hoard  was  made  up  as  follows,  and  the 
quahhcations  noted  are  I.ricfed  from  the  announcement  quoted  in 
the  press  as  given  out  from  the  White  House  at  the  time  the  .np- 
pointments  were  made.  The  announcement  as  widely  quoted  in 
the  press  had  every  man's  politics  immediately  after  his  name  as 
below. 


1.  William  Denman.  Democrat.  San  Francisco,  six-year 
term,  lawyer;  extensive  experience  in  admiralty  cases; 
interested  in  the  question  of  an  American  merchant 
marine. 

2.  Bernard  N.  Baker.  Democrat.  Baltimore,  five-year  term 
wide  experience  as  shipowner;  thirty  years  president  of 
Atlantic  transport  line  which  he  organized  and  operated. 

3.  John  A.  Donald.  Democrat.  New  York  City,  four-year 
term,  life-long  experience  in  steamship  business 

4.  James  B.  White  Republican.  Kansas  City,  three-vear 
term,  well  known  lumberman;  gained  knowledge  of  ocean 
transportation  problems  of  the  United  States  throuch 
experience  as  an  exporter;  director  of  the  Yellow  Pine 
Lumber  Manufacturers  Association;  member  of  the 
Board  of  Governors  of  the  National  Lumber  Manufac- 
turers Association. 

5.  Theodore  Brent.  Progressive  Republican.  New  Or- 
mnnp'r*  T^*"  '""^  =  '.^"^^''^  experience  in  railroad 
t^;  f/i,  ,T'"*^  i"'*^  adjustments  brought  him  in  con- 
nf  flJri,  '  '-""^.^^^^^t^vLse  shipping;  general  manager 
ot  the  Chicago  Lighterage  Co. 


274 


ixrLfENcic  OF  riiK  OREAT  \\\u  I  IH..N  H.iirTixi: 


In  the  haml*  m  thi«  gr,,,ip  of  nun  tu..  ia*k*  were  phccil 
Ihev  were  MranKer.  to  In.th  ta»k«.  I  he  ta»k*  thcnmlvc*  wtre 
c-nnrmn,,,  an.l  rntirdy  .lifY.rent  ir  .„,  .act.  ntlu-r:  lir,t.  .hat  of 
m.uunniK  the  nai.nn>  shippiiiK  '"  the  intm-M.  ..t  the  nati..n; 
«rc..n.l.  that  ..f  Imildinj;  ,hc  nation*  .hipping.  Ilicn'  tw  .  tasks 
have  no  nmrc-  relation  to  each  other  than  the  running  of  a  l-ico- 
motive  w.irk^  ha*  to  the  runninj;  of  a  railroad. 

rile  ShippinjT  Hoaril.  authorize.l  Se|.teml)cr  7.  lit  hi  was  ..r- 
>ranue.l  in  Janunrv.  1!M7.  with  the  admiralty  lawver.*  William 
Dentnan.  a^  cha.nrian.  Whereupon  Mr.  Ik-rnard  \.  Maker  vet- 
eran  ^h>p-n,H.-rator.  promptly  resigned,  the  general  Idief  Imnn 
t  lat  he  thnuuht  he  ,honld  have  htv„  ehairman.  His  place  wan 
'"led  i.y  Raymo.ul  l\.  Stevens.  I  ..nmcrat.  of  .V,,  ij.nmpshire 
educated  as  a  lnw.\er.  I.ut  reporting'  himself  to  !«;  a  tanner  His 
apiMMntment  was  called  a  jH.litical  one  I.v  the  Marine  Rn-icw  and 
other  paruT^  rmd  the  words  "  lame  «luck  "  were  use.l  in  con- 
iicction  witli  his  name. 

One  of  the  first  official  acts  of  the  new  Boanl,  Jamiary  M  was 
to  ask  the  ['resident  to  m.,ke  a  proclamation  prohihitiuR  ihe  trans- 
fcr  ot  vessels  inmi  .\merican  to  fnreiK,.  AaRs.  He  issue.l  such 
a  prnclatnation  Fehri,,-,ry  4.  The  Shipping  l]„ar.l  enforce.l  it 
very  rtuKlly.  the  only  exceptions  I.einR  a  few  special  ves.sels  Iniilt 
tor  very  specific  l.-rei^n  service,  sn,  1,  as  small  coasters  to  j^ather 
up  sujjar  from  Cuban  outports.  collecting  it  at  the  main  ports 
and  an  ice  breaker  for  the  harlnir  of  .Archangel 

r^ate  in  February  the  IloanI  asked  Congre.vs  for  power  to  co,n- 
mamleer  ships  building  in  .America  for  foreiKi.  countries  but 
■nch  permission  was  not  given  until  the  ITth  of  June  at  which 
time  the  board  uas  in  the  throes  of  the  Denman4;„ethal,  con- 
troversy and  ,lid  not  u.se  its  power  until  after  its  reorganization 
Ml  .August. 

They  sought  and  nbtained  from  Congress  power  to  control  the 
pnce  ot  steel,  which  was  materially  re.Iuccd.  therchv  lessening 
the  cost  of  the  governmen;  shipbuilding  program.  Thisw-is  ■[ 
great  advantage,  tor  the  j.ricc  of  steel  was  still  left  at  a  level 
ot  prohteering  price,  naturally  verv  stimulating  to  production 


RIIIPiflLriffO   IN   THE   VSntti  STATM,   1014   Ti.         IH      275 

The  Ftnrd  iirRcil  uikhi  ^hiplmililcr*  thf  gr  tliial  aduptiun  of 
the  Dirsfl  vn«;inc.  an  interna!  comlniHtinn  nil  Imrncr  which  made 
urtm  vaviiii;  Imih  in  fuel  ami  tarjjo  tpaee,  ;in(l  l»)  having  a  fniml- 
the-wtirld  fuel  railitn  emanci|)ate«  the  u»er  from  the  «lc|i«n<U'nce 
iiIKin  fnreiKi)  r.iai.  s.i  that  our  han<l  miKht  k-  >trenj;theiie«l  in 
•  iceari  frans|«,rtation  after  the  war.     This  wa-*  merely  advice. 

More  im|)<>r(ant  than  any  of  the*e  minor  activiticn.  however, 
were  t'lc  e(Ti.ri>t  to  increase  shiplniildinj;  l>y  the  two  methfxN  of 
lettinK  contracts  atul  actually  IniildiiiR  ships.     When  first  or^an- 
i/etl  the  MoanI  ili<i  not  plan  to  liuild  ships.    They  had  other  plan* 
for  their  fifty  million  dollars.     Within  a  short  time  there  arrived 
at  their  ofiices  almost  Mnuiltancou>ly  two  enthusiastic  am!  re- 
sourceful niininj,'  engineers.  Messrs,  luistis  of  IJo'ston,  and  Clark 
of  New  York.     They  were  accustomed  to  handlinfj  materials  in 
quantity.   Rcttinj,'  thii'^s  done   in   a   hurry.     They   presewteil   a 
plan  of  shipl)ui!din>j  that  received  the  approval  of  the  Shipping 
Hoard.      Within  five  days  they  had.  hy  telegraphic  summons, 
he'd   Conferences   in    Washington   with   nearly   all   the   leading 
uouden   ship  Guilders  cast  of  the   Pacific  Coast.     Conferences 
were  also  held  with  the  steel  ship  Imilders.     Out  of  these  con- 
fereiices  came  in  about  a  month  the  plan   for  the   fabricating 
plants  for  steel  ship-.     The  tiii!  -h  advertised  wooden  shij)  cam- 
paign was  an  immediate  result.     The  steel  ship  builders  were 
<(>  busy  with  long  time  contracts  and  so  far  Iwhind  on  orders  ami 
materials  that  they  held  out  little  hope  of  much  increase  in  out- 
put under  eighteen  months,  or  ity  the  middle  of  i!»">^.     In  the 
ii.oanwhilc  the  pressing  ship  shortage  of  the  spring  of  litis  was 
['lainly  in  sight,  and  the  woo<len  ship  builders  presented  plans 
whereby  they  could  enlarge  their  jilants,  call  in  carpenters  from 
the  back  country,  and  get  immediately  to  work  if  the  government 
w   j!d  guarantee  enough  orders  to  make  them  safe.      This  the 
iMKird.  acting  through  Me-srs.  Denman,  filustis,  and  Clark,  did 
and  did  p.-omptly  up  to  the  full  extent  of  the  $d(),000,()00. 

The  type  of  ship  that  was  agreeil  upon  for  many  of  the  wooden 
ship  Contracts  was  a  duplicate  of  each  builder's  l)est  ship.  A 
little  later  the  Shipping  Board  adopted  a  very  simple  design 


.'Trt 


•NfUKMii:  or  Tiir  .j.^T  u  »«  ri^is  .mmvu 


':;;;,';:;;„'::  i:"r  ,r  .rcrr' ""■'■;" -« ""-^ 

I.    I      I  "*  "*'  ****  'traiffhl  work  which 

•lr>  l.in.liar|wntcr.  ,ot,|,|,|o.  " 

The  plan  uf  ,he  M.,„«h  «...!.„  ,hi,.  ha.l  l*rn  t.  ,r.|  f.y  ^y. 
•ra  yrar*  of  MHTCc^ful  .ervicr  J,  wa.  really  ..„,  .,„.  .  fX 
»""M.p   k*.  ,h.,.,      Ihc  ......rac,  .ha.  wa,  mr,«.|  wa     h    |.1 

•"K  .her  >ar.N  ,n  ,ha,.  I.ca«^  .hey  were  tol.l  ,ha,  ,hcy  w.hII 

'■"K"Hvr  Liark.  who  wa*  workinir  for  il  a  vmf 
-.1  he  wo„M  .«„  contrac.  f..  ,h.,.  m.I.jcc'  o  .h  U  "' 
'-"«  a,.pn,,r,a,e,l  l.y  Co.,gr«s.  I,;  kn^J  ,h,,  ,„';  '^'^^ 
".-Ic  h.,n  hahic  for  jail.  I.„t  he  co„,i,,ere.|  .ha.  aM  „a,  cr 
.f  ..  re.«l,e.l  i„  .hips  ,.i„,  ,„,„  ,,  ,h„,  ,•  „^  ..^  .^ed  Bu  , 
were  w.ll,n,M..  risk  i..      Really  the  ri.k  w«,  nmall 

Hy  .h.s  .„„c  ,  March)  the  idea  for  fa!.rica.i.,K  plant,  for  „eel 

h.p,  was  ...r,n»Ia.ir,K.  the  submarines  were    '.cceernranDn 

l"-Kly.  and  ,he  Shi,„in,  Boar.l  was  rendv  .o  launch  "",' a  hu« 

>cha„,  ..,  ,,„,,,,,  ,^„„^,  ^,,^,  ^^^^,  ^^  .  _^^  .         h  -t"  a  huge 

a  Ik  appropr,a..on.  an  organiza.ion  for  .p.ick  work  and  a  man 
..f  large  executive  ability  to  carry  out  .heir  plan.. 

The  Government  Forms  a  Holding  Company  to  Build  Ships  ■ 
ft  is  interesting  „.  observe  .hat  in  the  attempt  to  huil.l  ships 
"uu  adopted  the  okl  const.tu.ion-Lea.ing.  legally  law-l,reakin.r 

.:>::■  ^"!;-"r"v'r'^  "^  ••*« "-'-'  --u-l t:  g 

laus  .,f  .he  F),s.r,c.  ...  Columbia.  April   Id.    nur.  an  ,  nlinarv 
orfKiration— the    ('merirpnrv    n..-.  /■  '  r.nnary 

In  ted   Set  J        '•"''^'^*.^"«^>    M«t   Corpr,ra.,on.   of   which   the 

al     h     :'  ,ck    ,  ;7"""'7'-  '"^-'^'^  "-•  'Shipping  Board,  held 
HI  the   stock.  nn.l   was  thercMorc  in  entire  control.     This  con- 

Sh  PPM,  Hoard  were  trustees  of  .he  Emergency  Fleet  Corpora- 
»'-"      i'>   l-.ng  an  or.bnary  private  corporation  it  was  clear  of 


HHU'Ht  iLinXU    i.H    THi:    CMITIO  J»TATI*.    IfMI    TO    IOI«* 


n. 


all  ihr  reil  ta|*  ..f  Kovrrnmenf  pr.K-fdiire ;  ihc  liriayi  .,(  tht 
evil  ,«vicr.  i„.,|  .he  l«.thcrN  check.,  arul  lalamc  of  K„vcrn- 
tnrnl  o,K-raiiu„,  The  Shi,,|,i„K  ll..ar,l  cuKI  coniract  w.ih  ii« 
crcauirr.  iht-  f.r..rrKe»..  licet  (urporation.  a  private  c..,M:ern. 
jii%t  at  It  ciilil  ;,Im)  contract  with  any  jhtplMiilder  fur  a  >-  „ 
with  a  Meel  itiilt  for  l,(m  kcg^  of  rivet*,  The  ,trrl  m 
rivet*  ;i.  I*,t  it  cou|,| ;  „,  ,he  l-merKency  Fleet  Cor|»ora  „ 

ircr  to  make  ship,  as  l)c^t  it  coul.l      It  wa.  al«.  intr.ule at  it 

»h.  .1,1,1  purchase  veH*cls  for  the  K-'vertmicnt  ami  ..perate  ihcm 
for   Sr  government,  but  it«  main  function  wai  to  huild  !.hips. 

GeHi-ral  Goethah  Becomes  Icneral  Manager 

Who  HhoukI  take  charge  of  the  Kmergency  Fleet  Corporation 
t..  execute  the  grand  program?  Here  a  weakne^i  of  govern- 
ment enterprise  showed  itself.  Kxperience  show,  that  war  ha. 
now  l*come  liu.ines...  enormous  Inisiness  rei|uiring  the  l.rgest 
and  most  ihoroughly  organized  economic  enterprises  that  man 
has  yet  conceived.  Our  attempt  to  do  the  biggest  thing  in  world 
iiKlustry-  build  ships  to  Ixrat  the  r  larine-shows  some  of 
the  difficulty  of  doing  such  a  work  ti      igh  the  electorate. 

To  build  .hips  the  Kmergcuy  fleet  Girporation  had  to  have 
money,  a  l.)t  of  it  and  quicl.lv  To  get  monev  it  had  to  make 
a  favorable  in.pr-  ion  on  (  ;  ^e^s  To  catch  congressional 
vote^  they  virtual..  ■  afted  Ala,  -r  (icneral  George  W.  Goe.haU. 
builder  of  the  fanama  Canal,  who  was  at  the  time  a  national 
hero  with  a  reputation  as  a  great  administrator.  The  General 
«li<l  not  want  the  job.  said  he  diil  not  know  anything  about  ship- 
building, but  they  almost  or  quite  forced  him  in.  (r>t  a  half 
I'lllion  dollar  appropriition.  after  which  the  shipping  program 
was  tied  up.  and  the  etTorts  cjf  the  nation  were  blocketl  for 
months.  chicHy  Ijecause  of  mistakes  in  ijersonncl.  but  partly  also 
through  defective  ty[)c  of  organization. 

(icneral  Gocthals  was  made  general  manager  of  the  Fleet  Cor- 
poration. Mr.  Denman.  chai.man  of  the  Shipping  Board  was 
made  president  of  the  Fleet  Corporation.      This  arrangement 


27S  I.VFLrLNCE   OF   THE   GREAT    WAR    froN    SHIPPING 

seems  to  have  provided  a  condition  of  divided  responsibilitv.  and 
to  have  developed  fricti,.n  from  tlic  start.  The  Reneral  manager 
was  appointed  In-  the  Hoard,  and  was  virtually  re.-ponsihie  to  the 
chairman,  .\ftcr  rw<.  reorganizations  of  the  Board,  the  bv-laws 
were  changed,  Nnveniber  iM.  so  that  the  general  manager  became 
an  appointive  otflcer  resiwnsilile  directly  to  the  president  of  the 
Meet  Corporation. 

In   Panama,  (ieneral  (Joethals  had  been  a  dictator.     As  the 
Canal  neared  completion  he  had  been  made  Civil  Covernor  of 
the  Panama  Cana!  Zone,  which  means  in  effect  that  he  was  sov- 
ereign of  a  substantial  part  of  the  earth's  surface.     He  was  an 
army  ..fticer,  where  discipline  and  responsibilitv  are  definite  and 
final,  an.I  wiiere  things  had  to  be  done  according  to  an  esta!)- 
hshed  and  complicated  routine,  ill  adjusted  to  speed.     In  his  sol- 
vlierly  desire  and  effort  for  perfection  there  was  a  natural  ba  : ; 
lor  a  cla-h  with  the  civilian  engineers  luistis  and  Clark,  who 
above  an  else  were  seeking  action,  speed,  with  the  least  possible 
red  tape.     In  maintaining  his  military  habit  <.f  responsibility  and 
line  authority,  he.  the  chief,  had  to  sign,  see  and  pass  judgment 
upon  nearly  everything.     The  mass  was  too  great  for  the  sys- 
tem '  to  produce  speed,     \early  everybody  had  to  see  the  Gen- 
eral, but  it  often  took  a  visitor  a  week  or  even  two  weeks  to  get 
up  to  his  desk.     Contracts  and  therefore  shipyards,  thousands 
of  men.  an.I  millions  of  dollars  worth  of  machines  waited  for 
weeks  until  Goethals  could  e.xamine  the  details  of  the  contracts. 
The  first  contracts  had  been  signed  on  the  navy  contract  blank. 
General  Goethals  had  many  different  contracts  printed  I)efore 
he  was  suited.     This  saved  money,  but  killed  speed.     We  nee.leil 
speed  and  an  administrator  who  made  decisions  tiuicklv.  picked 
out  competent  assistants  and  let  them  do  things.     Goethals  put  a 
great  i)aralysis  on  our  shipping  enterprise  because  he  could  not 
do  i[  all  himself. 

.Meanwhile,  shipbuilders  by  the  dozen  sat  around  Washington 
for  days  and  weeks,  waiting  for  contracts  that  they  had  fever- 

'  It  i>  interestinK  to  note  that  when  he  became  Quartermaster  General  he 
made  a  repu.at.on  by  smashing  ,he  whole  complicatal  re.f  tTpe  sj.tem  to  bit ' 


SHIPBUILDIXC    I\    THE    LNITED    STATES,    1914    TO     lUlS       279 

ishly  prepared  for  I)y  hiring  men  and  pettinp  equipment.  Xot 
knowing  (so  he  said)  anything  about  ships.  General  Goethals 
adopted  the  I'erris  design  (see  Chapter  VIII)  and  stuck  to  it. 
He  held  up  a  lot  of  contracts'  that  had  already  been  let.  and 
ordered  men  to  build  the  Ferris  design,  which  it  was  desired  that 
everyone  should  build.  As  the  I'erris  design  was  essentially  an 
iron  ship  design  to  be  built  of  wood,  and  required  timbers  that 
could  not  be  found  in  all  the  blast,  it  is  natural  that  construction 
lagged,  the  enthusiasm  of  the  country  waned,  and  there  have  been 
idle  shipyards  in  the  United  States,  .\.D.  1!I17  and  I'.Msi. 

To  further  complicate  matters  the  autocratic  general  found 
himself  subject  to  an  uncertain  e.Ntent  to  i  mere  civilian,  a  lawyer, 
his  junior  in  years.  For  months  the  press  of  the  country  fed  us 
with  the  details  of  the  Denman-Goethals  controver.sy.  as  to  what 
authority  each  had.  what  each  wanted  to  do.  who  was  boss,  who 
would  be  dismissed,  and  what  kind  of  ships  we  should  build. 
The  controversy  appeared  to  rage  around  the  question  of  ship- 
building material.  Should  the  ships  be  wood  or  steel,  yet  despite 
apparent  recrimination  on  this  subject,  both  men  showed  them- 
>elves.  by  their  linal  testimony  and  by  the  contracts  they  signed, 
to  be  in  favor  of  lx)th  wooden  and  steel  ships.  Thus  precious 
moiitlis  were  wasted. 

'i'his  lamentable  controversy  left  us  two  misfortunes:  the  one 
the  delay  in  the  beginning  of  real  work  and  the  other  the  diver- 
sion of  the  attention  of  the  United  States  from  real  constructive 
programs,  of  which  two  were  most  imperative:  the  making  of  an 
army,  and  the  !-iaking  of  a  fleet.  Finally.  Engineer.";  Clark  and 
Eustis  published  the  wliole  story  in  The  A'rzi-  York  Times  ( Tune 
S).  and  in  Sea  Po:eer.  July.  I'JIT,  and  the  President  settled  it 
shortly  afterward  by  asking  both  Denman  and  Goethals  to 
re.-ign,  which  they  promptly  did,  July  l'4,  liilT. 

During  the  latter  part  of  their  service,  after  June  17.  Messrs. 
Denman  and  Goethals  after  several  months  preparation  placed 
contracts  for  G42.S00  tons  of  steel  vessels,  and  let  or  agreed  upon 

•  lUiildcrs  were  ordered  to  stop  all  work  until  inspector,  were  on  the 
ground,  and  then  the  inspectors  were  not  sent  for  three  or  four  months: 


2*0         INKLtEXCi;    OF    TirE    GREAT    WAR    IPON    SHIPPINO 

ojntracts  for  1,218,000  dead-weight  tons  of  wooden  ships,  and 
were  ncRotiating  for  one  hundred  more  of  .t.'iO.ooo  dead-weight 
tons.  Thus,  within  forty  days  the  Shijjping  Board  executed  con- 
tracts or  had  agreed  upon  contracts  tor  a  production  of  tonnage 
eepial  to  two-thirds  of  the  total  of  our  overseas  fleet  l)efore  the 
war.  This  should  not,  however,  he  taken  as  too  great  an  achieve- 
ment when  we  consider  that  it  provided  directly  for  no  new  yards 
and  that  the  contracts  were  let  to  yards  already  many  months  or 
even  years  behind  in  orilers.  However,  it  did  have  a  stimulating 
influence  because  the  large  amount  of  businers  thus  definitely  in 
sight  enabled  private  owners  to  see  their  way  clear  to  finance 
enlargements,  es])ecially  as  many  of  the  contracts  provided  for 
substantial  payments  as  the  work  proceeded.  Thee  advance  pay- 
ments, however,  worked  out  in  some  cases  to  be  a  real  detriment, 
because  so  much  was  paid  at  the  laying  of  the  keel  that  owners 
at  times  found  it  profitable  to  lay  a  keel,  take  the  payment,  and 
stop  for  a  few  months  while  devoting  their  time  to  other  work. 


Epoch  II.     The  Routine  Scientific  Men,  the  Men  of 
Knowledge — July  24  to  December  20,  1917 

Along  with  Mr.  Denman  went  his  supporter.  Mr.  Brent,  vice 
chairman  of  the  Board,  and  Mr.  White  had  resigned  on  account 
of  his  poor  health  a  few  days  l^efore,  leaving  the  Board  reduced 
to  Mr.  Stevens,  the  farmer,  and  Mr.  Donald,  the  steamship 
operator.  The  influence  of  technical  requirement  is  evident 
in  the  next  appointees.  The  admiralty  lawyer  Denman  was  re- 
placed by  Edward  X.  Hurley  of  Chicago,  inventor,  and  also  busi- 
ness administrator.  He  had  originated  and  developed  the  pneu- 
matic riveter  and  other  pneumatic  machines  so  common  in  metal 
structural  work.  He  had  been  president  of  the  Standard  Pneu- 
matic Tool  Co.  of  Chicago  that  made  this  kind  of  apparatus.  He 
had  also  organized  the  Hurley  Machine  Co.  of  Chicago,  engaged 
in  the  manufacture  of  household  electric  appliances.  Three  years 
before  he  had  gone  to  Washington  as  a  member  of  the  Federal 
Trade  Commission,  and  had  served  there  two  years.     He  had 


SHIIBI'ILDIN'C    IV    THK    I'NITED    STATES.    1014    TO    10^      2SI 

serve.1  at  ITcsule.u  Wil.on's  request  on  the  Red  Cross  War 
t.unc.i.  then  he  went  to  the  War  Trade  Board  where  he  looke.I 
aner  te  export  hcense  work.  He  was  a  proved  business  ad  n- 
...tra  or.  but  there  was  no  ship.)uilding  in  his  experience 

1  h,s  held  o,  knowledge  was  brought  to  the  Board  of  Rear 
Adm.rai  Uash„,gton  Lee  Capps.  chief  constn,ctor  of  the  navv  I 
master  of  the  art  of  ship  design,  a  scientist  of  unquestioned' 
reputafon.     I  or  years  he  had  I,een  chief  of  the  Bureau  of  Co„- 
s  ruct.on  and  Repair  in  the  navy,  and  Secretary  Daniels  pointed 
om  the  fact  that  he  was  chief  constructor  from  VMKi  Z  V.J 
when  our  navy  more  than  doubled  in  size,  and  the  majoritv  of 
the  pre.ent  flght.ng  vessels  of  the  navy  were  <lesigned  i,y  him 
He  had  been  sent  abroad  by  the  President  to  represent  the  .Z 
ernment  ,n  nnernational  maritime  conferences.     He  had  been 
decorated  abroad  for  his  scientific  achievements 

This  !,r.Ii,ant  scientific  record  throws  no  light  whatever  on  the 
ques  ,on  as  to  whether  or  not  the  distingufshed  admiral  col 
budd  tramp  sh.ps  rapidly,  but  it  raises  the  inference  that  he    o  1 1 
not.     l>erhaps  Charles  Darwin,  scientist,  could  have  run  a  stock 
f  rm  to  pertection;  perhaps  not.      Perhaps  Herbert   Spencer 
ph.  osopher.  would  have  made  a  good  university  preside      bu' 
there  was  no  real  reason  to  think  so.     In  fact  the    tudy  of  busi 
ness  admn.strat.on  and  business  success  gives  us  abundant  reason 
o  be  eve  that  the  man  of  science,  the  extreme  technical  exp  " 
rom        """'    J"'-''''""  °^  ^''  ^"^"^'°"  ^°  '"^^'^  fi^l^ls  prevented 

nb2     11'  ""■  '",'"'  '''  "'"^  ''  ^^^-^'"P  '^''  entireb  different 
al.  t,_bus,ness  admm.stration.  that  which  tuilds  ships  quickly 

r::;a::;-rnrs:j;::gr-^----- 

c.oi:.infri!in^rs:£jSu;i;^^h^:s^^^ 
Which  iSuins,r=;rH:s7=i;,- 


-'*'•.'  I.Ni  I.IKN'C  K    OF     rilK    <;HK.\T    \\.\H     I  ton    SlIIPI'lNr. 

nifiital  processes  ami  liandiwork  a  new  machine.  At  this 
])tiiiit  some  C3i)italists  form  a  company  to  manufacture  thii 
machine  and  put  the  inventor  in  charge  "t  the  plant. 

Failures  that  waste  the  nation's  substance  by  the  millions 
a  year  arise  from  this  ty])e  <if  error.  It  is  always  a  grave 
ri-k  to  put  any  man  in  charjje  of  any  kind  of  work  that  he 
has  not  done;  and  a  successful  corporation  will  place  a  :  an 
in  charj,'e  of  work  that  he  really  knows,  and  will  not  try 
to  make  him  learn  in  large  scale  operations  something  he 
know>  not — as  happens  when  a  technical  man  is  suddenly 
put  in  charge  of  administrative  work.' 

The  \er\  excellent  and  distinguished  master  of  battleship  de- 
sign. Admiral  C'apps.  and  also  the  similarly  distinguished  .Ad- 
miral Harris  who  sncceedeil  him  tor  the  sjiace  of  two  weeks  and 
six  <iay-;  lietween  Decemlier  1  and  :.'(»,  liMT,  proved  that  there 
is  no  necessary  connection  betweeti  the  ability  to  design  a  battle- 
shi[)  and  to  bu''d  an  unprecedented  cpiantity  of  freighters  in  a 
short  time,  'l  liese  gentlemen  were  face  to  face  with  a  problem 
they  had  never  seen,  and  fur  which  their  experience  instead  of 
fitting  them  luul  unfitted  them.  With  plenty  of  money,  with  no 
regard  for  costs,  but  a  sliar])  regard  fcjr  waste,  they  had  stood 
as  watchdogs  over  private  concerns  to  see  that  they  built  battle- 
ships, built  them  nice)),  according  to  specifications  which  they 
had  tliemselves  drawn  :it  great  leisure.  Then,  too,  they  were 
versed  and  had  for  \ears  been  enmeshed  in  the  great  official  rou- 
tine of  red  tape  by  wliich  it  sometimes  takes  four  days  to  com- 
municate with  the  ma!i  in  the  next  room,  l)ecanse  ymi  can  only 
reach  liini  ot'licially  by  going  to  your  first  sui)erior  officer,  thence 
tu  your  -ecoiul  superior  ofticer,  thence  to  your  third  superior  of- 
ficer, and  from  him  to  tlie  next  door  man's  third  superior  officer, 
thence  to  bis  second  superior  ofticer,  thence  to  his  first  suijcrior 
officer,  and  thence  to  him,  which  may  take  four  tlays  or  two 
week».  This  i>  possibly  necessary  for  the  long  run  of  govern- 
ment expenditure,  it  provides  for  safety.  It  is  the  duplicate 
of  the  wonderful  system  of  checks  and  balances  in  (Air  federal 
government  which  protects  things  as  they  arc  and  makes  any 

'  J.  Kiissill  Smith ;  The  Llcmcnts  of  Industrial  .Vaiiur/i-mi-ti/,  p.  47. 


SlIII'miLDING    IN    Tin    L-NITED   STATES,    1!ll»    TO    l!)l<i       I'S.'J 

action,  ri>,'ht  or  wronp.  so  nearly  imp<wsil)Ie.  It  has  caused  dur- 
iiiK  the  j)eri..d  of  the  war  the  cssi,  :ial  ovcrtuniinj,'  of  the  cmisti- 
tutini,  i;  the  Oven.wn  hill  which  makes  the  I'residtiit  an  autocrat 
tor  the  period  „f  the  war.  This  followed  tlu  creation  of  nn 
entirely  new  extra  departmental  government '  which  "  onductiiijf 
much  of  the  nonmilitary  enterprise  of  the  war  and  c;  which  the 
Shipping  Hoard  with  its  holding  corporation  is  one  of  the  Ijest 
esaniple.- 

The  other  mcmhers  of  the  new  ShippniR  IJoard.  in  addition  to 
Messrs.  Hurley,  Donald,  and  Stevens,  were  Charles  R.  I'ajre. 
San  Francisco,  who  had  spent  his  entire  life  in  the  marine  insur- 
aiice  Inisincss.  with  the  exception  of  six  months  which  he  spei  t 
with  a  firm  of  shipowners,  and  IJainbridRe  Coll)\,  who  had  prac- 
ticed law  in  New  York  since  l^!»l•  ;uid  had  I'leen  one  of  the 
founders  of  the  Progressive  national  part  v. 

The  new  Boar  1  organized  with  .Mr.  Hurle.-  as  chairman,  lie- 
also  became  president  of  the  Emergency  Fleet  Corporati(  n  with 
Admiral  Capj)s  as  general  manager. 


Requisitioning  and  Commandeering  of  Unf.nislud  Fessels 

As  mentioned  above.  President  Wilson  had  conferred  upon 
the  Shipping  Board,  by  an  --ler  of  July  i:,.  the  authority  to 
commandeer  all  f(;rcigt'  vessels  under  construction  in  the  United 
States.     By  an  order  i.s.ued  on  .lugust  ;{.  the  Board  took  advan- 
tage of  this  authority.     Xot  only  were  the  foreign  vessels  com- 
mandeered, but  als(j  all  vessels  under  construction  for  Amer'  -is 
were  retjuisitioned.     They  were  requisitioned  under  two  sch 
By  the  first  scheme  the  Shipping  Board  paid  to  the  owners  oi  ..le 
vessels  the  amount  that  they  had  already  expended  for  construc- 
tion.    The  contract  was  then  taken  over  and  all  future  pavments 
were  made  by  the  Shipping  Board  to  the  shipbuilding  company. 
Under  the  second  scheme  the  Shipping  Board  agreed  to  return 
the  .ships  to  the  original  owner  at  the  end  of  the  war,  or  when 

^n',r,'."'w'"-  "'5    Shipping    Boar,l,    Fuel   Admi  istratioti.    War   Industries 
Jo.ird,  War   i radc  Uoard  and  central  statistical  organization. 


i?"**  INKHENCK    OF    THE    C.KKAT    WAR    II'ON    Sll  ll'IMXO 

cuiiiplctcd,  providi'd  the  owner  rcimbtirscd  the  K"verniiieiU  for 
its  expenditures  and  agreed  to  o|)erate  the  vessel  under  the 
ShippMij;  I'.oard's  requisition  program. 

1  he  domestic  vessels  were  re(|uisitioned  for  three  reasons: 
first,  in  order  that  construction  niij,'ht  he  speeded  up  In-  the  gu\- 
trnnient;  second,  in  order  that  additional  tonnage  might  \k  se- 
cured for  goveiinnent  needs;  and  third,  to  decrease  the  freight 
charges  on  shipment^  to  luirope.  The  new  organizaticni  con- 
tinued the  previous  program  of  letting  contracts  for  ships  to  Ih; 
luiilt  in  private  yards  and  let  contracts  for  additional  tonnage, 
both  wooden  and  steel,  although  the  wo.xlen  ship  contracts  have 
heen  decreasing  in  number  because  of  the  scarcity  of  timber. 
According  to  Mr.  Hurley's  testimony  l)efore  the  Committee  on 
Commerce  of  the  I'nited  States  Senntc,  the  Shipping  Hoard  con- 
trolled on  December  21,  UtlT,  work  in  l;ij  yards,  r,>s  of  which 
were  old  yards  and  74  new  yards,  created  since  January  1.  1!>1T. 
Twenty-two  of  the  old  yards  were  building  only  vessels  which 
had  been  recjuisitioned  by  the  shipping  board. 

I'our  forms  of  contracts  for  building  ships  have  been  used  by 
the  Shipping  Board  as  follows: 

1.    The  lump-sum  contract. 

-'.    The  cost-plus  contract  with  guarrnteed  fee. 

•'{.    The  cost-jilus  contract  with  sliding  .scale  fee. 

4.    The  agency  contract. 
By  far  the  greater  number  of  contracts  have  been  let  under  the 
first  class. 

7Vjr  Building  of  Nczc  Sltiffyards 

The  new  yards  have  Ijeen  built  under  three  general  schemes: 

1.  I'rivate  companies  have  built  yards  entirely  with  their  own 
capital ; 

L'.  I'rivate  companies  have  built  yards  with  capital  loaned  to 
them  by  the  United  States  (lovernment  and  advanced  on  con- 
tracts for  the  building  of  ships; 

:5.  I'rivate  companies  have  built  yards  for  the  United  States 
Government.     Under  this  form  of  contract  the  Shipping  Board 


siiirmii.oiNc;  i\  the  inited  states.  1014  to  lOlS     2S.'l 

has  iuriiishc<!  material!*  and  lalMir.  and  the  company  has  fnr- 
nishcfl  the  organization  and  technical  kMnwIedKe.  The  yard  is 
the  property  nt  the  Shipping  Mnard.  Hoj;  l>land  is  an  example 
of  the  last  scheme,  as  are  the  two  other  so-calletl  Roverjiment 
yards. 

These  three  large  asNemljIing  |)iants  no.v  lieinp  constructed  arc 
(n  Ifojr  Island.  Philadelphia,  the  American  International  Ship- 
Iniildinj;  I'orporation;  (-2)  Bristol.  Pa.,  the  Merchants  Shiplniild- 
inp  Corporation:  and  (:})  Newark.  N.  J.,  the  Suhmarine  Boat 
Company.  The  method  is  well  ilhi.strated  hy  the  chief  poi.ts  of 
the  contract  with  the  .American  International  Shipbuilding  Cor- 
poration for  the  yard  at  Hog  Island. 

The   American    International   Shipbuilding  Corporation   is  a 
.sul)sidiar-  corporation  of  the  .American  International  Corpora- 
tion.    It  was  formed  for  the  purpose  ot  co.i.structing  the  Hog 
Island  yard,  and  building  .ships  for  the  government.     In  May. 
1:M7.  the  United  States  (Jovernment  through  the  Shiiiping  Board 
invited  the  American  International  Corporation  to  undertake  the 
construaioii  of  a  shipyard  to  contain  .".(>  ways  and  to  build  therein 
a  fleet  of  200  cargo  vessels  of  an  aggregate  tonnage  of  1.. 100,000 
tons.     Early  in  July  the  American  International  Corporation  had 
prepared  plans  satisfactory  to  the  Emergency  Fleet  Corporation 
and  ha  :  agreed  upon  the  essentials  of  the  contract  under  which 
the  work  was  to  be  done.     It  was  expected  tl  s  work  would  begin 
August  1  or  Ijefore.     This  a^ree'.ient  provided  for  the  forma- 
tion of  the  operating  company,  the  .American  International  Ship- 
building Company,  all  of  whose  acts  and  undertakings  were  guar- 
anteed by  the  American  International  Corporation,  which  was 
then  ready  to  begin  immediately  the  work  of  constructing  the 
shipyard.      Negotiations    were    interrupted    by    the    Denman- 
Goethals  controversy  and  the  resignation  of  both  of  these  gentle- 
men.    But  immediately  upon  the  appointment  of  Admiral  Capps 
they  were  resumed  and  continued  with  astounding  leisure.    After 
the  loss  of  two  and  one-half  months  of  the  best  workinj  time 
of  the  year,  the  contract  was  aw-nled  on  September  l;{,  1917. 
and  the  American  International  Shipbuilding  Corporation  was 


^•"J      iNKLrr.NCE  OK  nil.  «;hk.\t  war  irn.v  siiirpiNf. 

instructeil  Jo  pMcced.     Work  ol  IniildinR  the  >lii|)\ar(l  at  I  log 
Matxl,  the  larjjc't  shipyard  in  the  wnrl.!.  Wc^aii  imiiudiatclv. 
I  lukr  ilic  ciiiifract  nt  flic  American  liitcrnatiniial  (oriMiratiun 
uitli  l!ic  Shii)|)iiiK  lioard.  tlie  Shi|)|iiii;;  lli.ard  aKnvd  to  pay  for 
the  necessary  materials  and  lalior   i.  r  tiie  c<-n>truction  nt   the 
^'lip\ard.    The  t'>.rp<jration  pnrdiascd  the  land  at  a  cost  of  alKiut 
tfJ.Wit  [KT  acre,  aiul  agreed  that  the  j;ovirnment  shonld  have  the 
'  ptiuii  ,,f  takiiijr  over  this  land  at  the  same  price  phis  any  pay- 
ments that  were  made  in  the  form  of  taxes,  etc..  to  the  State  itf 
iViiiisylvania  or  the  city  of  Philadelphia.     The  Shipping  I'.oard 
aiv.  aj^reed  to  p.iy  for  materials  and  lalior  nsed  in  the  construc- 
tinii  i,f  the  vessels,  the  .shiplniildini;  corporation  furnishing,  as  it< 
share,  only  the  organization,  i.e.,  the  know-how.     Certain  of  the 
executive  ofticcrs  of  the  corporati m  were  not  paid  hv  the  govern- 
ment, hut  were  paid  by  the  corporation  itself.     As  comi)ensation 
for  the  huildinf,'  of  the  yard,  and  the  ImildinK  of  the  ships,  a  fee 
amounting,'  to  ahout  si.\  million  dollars '   i,  to  k-  paid  to  the 
jliiphuildiii},'  company,  on  a  contract  callinj;  for  total  payments 
of  appro.ximately  $H;,-,.0()o,(MK).     h,  case  the  vessels  are  finished 
at  a  lower  cost  than  the  estimated  cost,  the  surplus  is  to  lie 
divide(l  ecpially  lietwcen  the  iJnerKeiicy  Meet  ('orporation,  the 
American  International  Shiphuildiiij,'  Corporation,  and  the  em- 
jiloyes.     I'remiums  are  also  otTered  for  the  early  delivery  of  the 
ves>els,  which  can  not  exceed  #1»,(MM)  apiece  for  cargo  vessels, 
and  $1T.."><M»  fcjr  troop  vessels.     If  the  corporation  fails  to  live 
up  to  its  contracts,  a  certain  amount  of  the  $<J,0(K),0()0  fee  is  to 
he  deducted  as  a  penalty. ■ 


Rise  of  I'ublic  Dissatisfaction 
By   Xovemlier  the   I'.oard  had  let  many  contracts,"  hut   the 
country  was  getting  very  restive  under  the  nonappearance  of 
ships,  and  the  -jeneral  slow  progress  of  actual  work  followinp 

'This  figure  muiiuK  larpc  .mid  rcsiilti-d  in  newsp.ii)tr  critici-m.  but  it  was 

a  cheat)  inytstiiKiit  if  it  furnished  K"ik1  administrative  experience,  for  this  is 

a  commodity  the  government  did  not  have,  and  which  mcncy  can  not  make. 

■  Testimony  hifore   Senate  (."ommittec  on   Commerce,  pp.  2A\    24J 

'The  construction  of  a  Kreat  tieet  of  vessels  of  8,800  tons  or  over  was  one 

of  the  UtA  steps  advocated  by  (.hairman  Hurley,  of  the  Shipping  lioard   and 


smiMn  lUHx.;  iv  the  i  nited  statesi.  1»U  t<.  HUs     2««: 

the  FVtunan.(;.,..thaN  opiH-Kle.  The  leimirclv  <lelav.  an.i  the  n.l 
•ajH-  .Upartmental  meth.Hl.s  ui  Rrar  Admiral  Cappn'  a.hnini^tra- 
li<.ti  of  the  Fleet  CuriMiium  c.nvinccl  the  majorilv  uf  thnuKht- 
tiil  pe-ifile  that  s,.methitiK  was  the  matter,  aiul  it'l^Kan  tn  U- 
.ii^cvered  that  we  were  still  trying  to  do  administrative  work 


The  i..|l«MviriK  ubie  ihow«  lite  number  of  \t%teU  uiiilrr  rnn.r,^.   .»-»  i 
contract  and  requisitioned  by  the  KmerKcncyVleirCo";;:';.')*""*""'  '^"•'•"« 

T>p;^."^  ;>-«'  N-o.  of  vctu  '^""V>aM;r"" 

_<S>  3.186.400 

Total.  .  iiitnctfd  for   004  7"„ ,  ^y, 

Contr.ict»  r«-nding  99  610000 

Tutaii <jjj_j  rvij~j — 

Tot.iN  rifiui.itioned  Vail  tVpc*  i   .'  •420  lo29',Sn« 

,*■;=""' 7"" ^45^  ^^^, 

vt„X    1'57.57S  ton!:""    ^"""'"''"•"'    ve.sel,   con.p.v  -d    and    relca,ed-J3 

Type  of  \f»,c|                                       j^  -  ^  Dead  weight 

4.0(K)  t/.n. \'l  1,4J«,500 

4,700     •• ]°  64.000 

5,000     ■•            ,1^  56.400 

6.00(1     "      ...    ; '^  800.000 

7.S(H)  ton'!  and  tmdcr 7«  ,"*^'*^ 

Km)  t. .ns                      i^  569.200 

O.iMK)     •• 5;  47530 

10.000    ••     ;. Vi  ^*^'0'» 

_^  323.000 

'I'otals    on  — 

S"  4,164.300 

Cargo  and  transport : 

8.000  tons   ....  fn 

_70  560.000 

Grand  totals  oo,  T'^TT,' 

**♦  4.724.300 


-""*       i.\ri.it;v»»;  OK  rill!  is«r.\T  w  am  i  it»\  Hiiiprisr. 

with  ftw  exixrii'mctl  .nlminiMraMrn  ..r  -.liipliuililcrv'  With  the 
cmiiiiK  of  winter  thi-  rtW  U\k  Hien«i«.t  era  oi  the  FIcrt  I  .r|><. ra- 
tion went  out  under  a  lire  ..i  pulilic  indignation  and  hostile  cim- 
Kfcwional  critici-tni  and  iiive'liK'ati.m.  The  ntaife*  in  \U  iwssing 
were  a!«  folluw*. 

On  the  .list  of  Octofjcr.  (  hairnian  Hurley  received  a  letter 
from  the  Atlantic  I'oatt  Shipbuilder^*  Ass.Hiation,  callinjj  hi« 
attention  to  the  fact  that  up  to  the  prexeiit  tune  shiplniildcr!.  ha«l 
not  liccn  accorile<l  pro|)er  opjMirtunity  of  ofTeritijj  their  experience 
and  c<«)|K-ration  to  the  K"vcrnnient.  They  proposed  that  they 
ap|H)int  a  |)ernianent  committee  of  shipbuilders  to  confer  with  the 
ShippiuR  IJ<«ird,  ami  other  departments  of  the  K"vernment  with 
rcnanl  to  five  subjects-  which  were  the  basis  of  a  conference 

I  Hail- weight 
No  of  \rt»rlt  ToniiaKr 

Collicn    9  M5<K) 

l'a'i»tiiKtr  an  1  cargo  o  ^ ('55^ 

TaiiUcr.    M  SftSilM 

*-»''K"  317  2.im.7^0 

T»iial«  J9J  2  771 9JJ 

(<raiiil    total*    rcc|uiiili(ini-(l    and 

uiuKr  contract U77  7,4%JJJ 

Ihf  r«f|Mi«itiunc(J  vessels  completrti  and  released  are  as  follow* 

iaMk.T,  ;;  :;  \f/^> 

<^*'«"  _«  i6om 

■'^°'»'*  33  IsiiTS 

,  _.,  Philarlelphia  A'ufc/iV  l.i-diier.  November  27  1917 

»  ?\;l;,:r;;,  J!-:;;r"!  '■r,-;^:i:iz;;l.:'s:'^;i:x- 
h,  r.,,„„.,,,„,  ,„ „„.     ,,,,,,. „,,„ J,,,. 4,,:,v,irsh ;;,,,',",  t 

*va<  tl  I  onv  one  who  look   1  <i  ur..  lOiwuui  „  v  "'i'r"iK   '  o.irii.  nc 

civilian  .armng.  *   (W(MK)<)a  year}  commensurate  with  his 

(.•oa,i''    •^"^J""""''"  »"■'  »<andard,/ation  of  shipyard  wages  on  the  Atlantic 

ouifi,^!:^:^rwi^::;^r:^,-«:ftz"'  '"'>- '-  ™-y  shi;. 

.natcrial"'"'    """'"'''   "^    "'''""'«'    "^'""'>-    »"'•   d-'-'ivcry    of    shipbuilding 
5.    l-(juitat.le  policy  for  the  adjustment  of  unfinished  >liipbuilding  contracts 


!«iiiriirii,Di.\G  IX  TiiK  I  xiTED  «Tvnt.-«,  KM!  tk  H»1<«     2^f» 

ilmi  clay  l«f«rfn  jIh-  Shippinj;  M.iar.l  ami  one  luimlrc.l  !»lii|>- 
liiiihlir-  wli.i  hat!  Utii  iiiviit.l  in  Wa.hiiiK'luii  Ilcforc  ihi-*  com- 
mittff  was  a|>|»iiititctl.  however,  ihc  S-KJely  of  Naval  Architect* 
ami  Marim-  Iviinmeer".  met  in  New  York  ami  *ent  to  the  I'resi- 
tlent  .11  the  L'nite.l  States,  NdvemlH-r  |t>.  |!t|7.  a  iwtiti.m  which 
hy  il«  mere  statement  of  fact  was  almost  ilenuncialion.  for  it 
taiil : 

U'hfretu,  M  the  present  time  no  ex|Rrienceil  huiUler  of 
merchant  shi()>  m-cnpies  any  position  where  the  counsel  of 
-uch  men  is  heard  in  the  decision  of  national  |)olicics,  while 
other  important  industries  are  now  reprcsente«l  by  the  rec- 
oRni/ed  experts:  lie  it  therefore. 

Ni'uhiii.  Ihat  the  Smiety  of  Naval  Architects  and 
Marine  Kn^'ineers.  at  its  twenty-fifth  asscmhlaRC  in  the  city 
of  New  York,  on  Novcmlwr  M,  most  re  ,,ect fully  and  ur- 
KCiitly  petitions  the  President  of  the  Unitc<l  S'ates'of  Amer- 
ica to  apjH.int  as  a  memlnrr  of  the  Council  of  National  De- 
fense a  re|)resentative  builder  of  merchant  ships  who  shall, 
by  reason  of  his  experience,  ability,  and  business  vision,  be 
(lualtfied  to  sit  in  the  high  council's  of  that  most  important 
body. 

Stevenson  Taylor, 
Lieutenant  Commander  U.S.N.R  F.. 
President,  Society  of  Nmal  Architects 
and  Marine  Engineers. 

The  previous  week  the  follow ing  illuminatinf;  dialogue  occurred 
before  a  Senatorial  committee  which  was  (juizzing  Mr.  Homer 
IVrgnsoti,  once  naval  architect  of  the  United  States  Navy,  and 
then  (jresident  of  the  Newport  News  Shipbuilding  Company, 
ojicrating  the  largest  shipyard  in  .America: 

Senator  Martin:  "Would  the  program,  in  your  opinion, 
have  moved  any  faster  if  a  practical  shipbuilder,  in  the  first 
place,  had  been  put  in  as  general  manager  of  the  Fleet 
Corporation?" 

"  Yes."  .\lr.  Ferguson  replied,  "  So  far  as  I  know  this 
is  the  first  time  since  the  program  was  put  under  way  that 

to  conserve   the  interest  of   shipbuilders   and   the   United    States    Shipping 
Board.       (Philadelphia  /'ubiic  ledger.  October  31.  1917.) 


.1  practical  -.hi|.litiil.Ur  wa*  ever  a^kcl  ..fticiallv  f..r  hi-,  ml- 
vice  ..r  .iiKKcMiorv*  a*  lu  «hi|il,uili|inj;," 

At  ihr  littw  Krar  A.lmiral  (  a|.|.»  rr,iKt»r.|  a*  ijcucral  manajier 
-f  tin-  I  tr.f  «  .  r|...r.ili.  fi.  Mr  IVrKU...ti  xva»  a»k»il.  lie  «ai.|,  !•> 
take  tlu'  place.  I.m  when  lie  l..uti.l  hv  wmiiM  |*  yjven  tio  auth..rity 
he  <leclinei|, 

III  c..Miiecti..n  «ith  Mr.  Ier>{ti*.,ir,  altitiulc  townnl  this  p-«i. 
li.'ii.  alleiiti..ii  !.li..iil.|  Ik-  called  to  the  cmfuMMiu  i.f  auih..rtty 
that  e.ilcreil  int..  the  Dentii.ui-C.^thaN  tnuihle.  and  aUu  to  the 
.it>.,%r  nietiti..neil  change  in  the  ortfaniiatiun  nf  the  l-lcet  Cor- 
jioratimi. 

Vhv-v  ver>  direct  civilian  ref|ue«t!«.  in  cnmhination  with  th? 
revelatiuiH  ..f  the  n..tie\|K-rt  character  <>{  ihc  per«.>nncl.  :iimI  the 
iiiisati>laci.ir\  state  ..i  atTair«.  pr.Hliicc.l  pr.nipt  rcMihs  imt.  how- 
ever, in  the  arrival  .,t  the  ^hipimililcr.  Imt  in  the  apiv.iniment. 
•VovemlHT  I.-.,  ot  Mr.  (.harle*  l'ie«  as  vice  president  of  the  l-mer- 
Keiicv  Ileei  (  urp.. ration,  to  have  charge  r.f  actual  con-.tructifm 
ot  the  ve,"ei-<  and  to  >|H'e.l-up  ot  delivery  of  materials,  .Nine 
•lavs  later  came  the  aniemlnient  of  the  liy-laws,  makiiii,'  the  ^en- 
er^l  manager  the  ap|xiitifce  ot  the  presi.lcnt  of  the  Kmei ;,'cncy 
Meet  (  ..rporatinn.  .\  lew  day^  later  .\dmiril  Capps.  plfadini; 
ill  health,  roij^ned.  although  it  was  generally  snp|)osed  that  the 
chanji','  in  the  l.\-laws  on  one  side,  and  the  ap|>.iintmcnt  of  Mr. 
I'ie/  on  the  other  ^ide  had  made  his  p»isition  less  aRreeahle. 

Adntiriil  l{,irri.<  hcioiiiiX  Maiuh/rr 

N'ot  vet  conviiuid  ,,i  the  inefVicacy  of  the  technical  rather  than 
till- .idiniiii^lrativc  e.\|a-rf.  U.ar  A.lmiral  Frederick  U.  Harris,  oi 
the  iiav).  u;i-  iinmedi.iicly  appoiiite.i  to  .ucccul  Admiral  Capp. 
as  the  ;,'eiural  maiia^'cr.  alilmuj-h  Admiral  Harris  had  had  iioth- 
nif.'  more  t..  .lo  with  ships  than  tlif  dcsi^jniiiK  of  water  front 
Construction  work:  namely,  ilry  docks.  sli,,|,s,  terminal  wharves, 
tloatinK'  dry  docks,  shiphtiijdin-  ways.  He  had  not  been  c\en  a 
naval  constructor.  Inn  had  ha.l  c'-.arj,-  of  the  navy's  construction 
Work  on  shnrc.     IK-  rcsi-ncd  Decemher  :.'m.  giving  as  a  cause  the 


•  iiii'iu  iiiMM.  IN    rue  I  xiTKii  «r\rK«.   MM  I  to   iw|s     :»{»! 

rarnittj,'  <>f  numrr»  li>  hi.  Milcnliiuitr.  nvrr  hi»  heail  to  hi^ 
.ii|icri..r».  winch  I.4.I  .ncurrcJ  ,ii  ihr  rn|iK>t  of  irftkcr*  ui  the 
.Sh(|>|>tnt;  I5"ar<l. 

.v.-./  / .;/•••  ,»M(/  Ihi-  tmlujlridl  TroubUi  of  Pfmotratu 
Sociitlitm 

Ft  may  U-  .ai<l  in  fav..r  ..f  the  n-.!  ta^te  wienii*!  ailmititMrntioii 
Ml  Mc.^rv  «  .i|.|u  nii.t  llarri.  fh.it  l.v  ihdr  rare  ari.l  nrttunv  nt 
i.'iiir.ut.  tlu->  »av«>.|  th»'  i-..tinir>  ...riic  tn-.tu-x.  ( hic  cMimatc 
Kivo  Mm-  am..»m  a^  iM;,,imni.(h»o  .,m  .,f  a  t.-tal  nf  i|:i(K(.ih»o.. 
•MM..  Ihi,  „„.,K-v  ot  coi.rn-  ha.l  a  i-crtain  vahic.  but  in  .aviiiK 
It  thc>  I... I  imaliiahic  time.  In  the  HunN  nf  a  conwrvativc 
pulihci-t  .1  iiaiintial  reinitatinii.  writing  at  the  time  of  the  pa..- 
inn  A'hjiiral  (  appn: 

riu-  actnal  rec.r.l  of  the  Shipping  n.,anl  i^  HumtthiiiL' 
appallMi«  aiMl.  it   u  were  narrate.l  VMthoiit   iVar  ..r   lavur 
v\Mii!.!  atrnni  a  warning  »..  impre^ive  that   it   .h.ml.l  !«! 
hee.le.l.     i  here  u  a  kind  of  iM.ar.l  that  wnul.j  nm  lue.l  am 
uarnmu,    where    hnreancratic    liaLit'    an<|    red    tajK-    rule* 
have  It-en  allowed  tc  have  *\\av  tor  manv  vear*.     The  Ship- 
ping   li'iar.l   han  ahnost   o-mpletelv      asicd   n..f    le^n   than 
seven  ninnlh<i  of  invahtahle  time.     linildinK  arr3nj;i-ni<nf* 
which  were  far  advanced  f-mr  nr  five  m..nth>  ajjo  have  In-en 
canceled.      C.ntract.s   complcte.l    and    rea.Iv    for    siKiiature 
were  Iicld  np  for  three  month,  in  order  that  .\dniirai  (aims 
miK.t  nninitely  examine  and  .Id.ate  the  innumeral.le  details 
ot  the  contracts     It  ^eeme.l  more  important  to  .  .   .  otWciaU 
that   every    little   <letail   of   the   contract    should    W   made 
micro^copiraily  accurate  and  in  the  i*st  i,„„,  than  that  the 
cmitry  should  have  ships  when  it  needs  ilum.     The  wh.. It- 
record  IS  one  of  nnhecihty.  I.y  a  hoard  coutainini;  a  con  id- 
erahle  inimher  of  rcall>  al.Ie  aiul  patriotic  men.  and  it  throws 
one  l.rilliant  h>jhf  on  Kovcrnmental  acti. .n.    It  does  n.  .t  pr.ne 
tliat  the  t'overnment  can  never  tlo  i,c.tter  than  that,  hut.  in 
my  jnd.;ment.  the  severe  "let  alone"  policv  would  have 
Riven  us  more  ships  than  we  thus  far  have  promise  of  and 
would  have  unen  them  far  more  quicklv  than  we  shall  ret 
niem.  .      .   .\o   patriotic    .\merican   citi/en   could    possii,lv 
know  the  tacts  without  a  jjreat  deal  of  feeling  against  a 


•2'^2  IXFLIENCK    OF    THE    GREAT    WAR    IPON    SHIPPING 

system  which  would  make  such  thiriRs  possil)le.  It  tlie  war 
shoulil  I)e  won  with  grave  ditlicuhy  and  require  an  extra 
year  ot  tij,'htin{j,  it  would  he  due  as  much  to  these  series  of 
events  as  to  anything;  else. 

Some  of  these  contracts  that  were  thus  heUl  up  for  the  minute 
scrutiny  customary  in  the  huilding  of  battleships  in  times  of  peace 
were  fur  nothinjj  less  than  the  great  fabricating  |)lants  with  which 
America  ha-'  boasted  she  would  save  the  day  for  the  Allies  by 
building  ships  at  a  speed  never  before  seen.  There  is  no  doubt 
also  that  for  the  first  four  month-  after  the  government  com- 
mandeered the  vessels  in  progress,  there  were  less  ships  built 
than  would  have  been  the  case  had  the  builders  been  let  alone. 
The  yards  were  busy  working  on  contracts  for  private  parties, 
said  contracts  having  been  made  in  many  cases  a  long  while 
before  under  conditions  of  lower  priced  labor,  more  al)undant 
and  cheaper  materials.  In  many  cases  the  builders  stood  to 
lose  on  the  com])letion  of  some  of  the  contracts.  Naturally  they 
hesitated  about  pushing  them  as  vigorously  as  they  would  push 
other  contracts  that  were  on  a  better  price  basis.  This  problem 
had  arisen  in  England  and  been  settleil  by  the  shipowners  com- 
ing forward  with  more  money  to  enable  the  shipbuilders  to  meet 
the  new  conditions,  and  in  this  country  private  owners  had  been 
glad  to  do  the  same  thing  and  were  doing  it  right  along.  But 
with  the  government,  it  was  different.  The  Shipping  Board 
found  a  company  working  slowly  on  a  certain  contract  and  pro- 
ceeded in  bureaucratic  fashion  to  hold  them  up  tight  to  that 
contract.  If  it  involved  loss,  that  made  no  difference.  It  was 
up  to  the  shipbuilder.  He  had  made  the  contract  and  must  live 
U])  to  it.  If  he  lost  money,  that  was  his  look-out.  This  forced 
the  yards  to  work  slowly,  to  do  their  work  as  cheaply  as  they 
could.  X'arious  students  agree  that  up  to  December  at  least,  the 
commandeering  process  by  the  Shipping  Board  had  resulted  in 
less  ships  rather  than  more  ships,  as  we  had  so  enthusiastically 
hoped. 

As  had  been  the  case  in  England,  also  in  America  there  arose 
the  charge  of  needless  change  in  specifications  of  ships,  of  which 


smrnuii.DixG  in  the  united  states.  1914  to  inis     of,:j 
there   was   much   un<Ier   Ix^th   General   Goethals   and    A.lmiral 

The  cominfr  of  winter  found  the  Kovernnienfs  great  ship- 
yards „,  the  LeKinninff  stages  of  construction.  The  giant  vard 
at  Hog  siand.  Philadelphia,  was  still  but  a  great  nu'ra"  ;^"h 
..len  wad.ng  around  in  the  freezing  mud  into  which  they  were 
d nvmg  p.les  l,v  the  tens  of  thousands,  upon  which  were  to  come 
later  the  h.ty  ways  of  the  world's  greatest  shipvard. 

W  hen  we  consider  that  this  was  Deceml,er.  V.m  we  must  ac- 
cept this  spectacle  as  a  partial  measure  of  the  difficulty  of  achieve- 
mm  i.y  government  in  a  democracy.  We  can  blame  the  Ad- 
m  ra  s  for  three  or  four  months  of  delay  while  thev  discussed  the 
cetads  o,  contracts.  We  can  lament  that  General  Goethal 
stopped  the  speedy  work  of  Eustis  and  Clark.  President  WiI=on 
.s  responsible  for  a  share  of  the  .lelay.  It  mav  be  1  a,  c  ^  n 
g^^eral  defense  ot  the  Administration  that  the  President     ad 

p.ng  I  oard  w.th  the  power  to  build  ships,  but  there  is  no  getting 

Z   n   V  r-n-^'  ''"^  """^'^  responsibility  for  months  of 
delay   ,nsh,pbu,ldmg  comes   back   directly  and   solely   to   the 

f  re     at  p'     .T'',  ''''^'"'"  ''  '''''  '^  ^^  '^^^  -«' '^s  be 
.ore  that  Loard  had  even  gone  through  the  formalitv  of  organ- 

nms.     He  could  have  organized  it  in  seven  davs.     Further  fhan 

aw  en  ,  convened    it  could  have  had  well  matured  pla" 

read,  to  execute    for  there  was  plenty  of  talent  in  the  country 

n     d  ?:  e  twH      "  "''  ''  ^°"'"  ''''''  '•^^  P"--'^-^  --t  ' 
tartn'o    t^         anticipation  of  a  Shipping  Board  and  the 
start  I  g  ot  the  governmenfs  shipbuilding  policy,  so  that  nhns 
could  have  been  ready  to  launch  almost  asVshi/ from  the  w  Ts 
Th  s  ,n  eed  was  exactly  what  was  done  in  the  Food  AdminisSa: 
t  on.      t  u  a.  organized  and  at  work  for  weeks  while  Congress 
^le  ate,    on  the  bill  giving  it  power  and  monev.     Thus  'ev"n 
-.th   the  congressional  action   delayed   as   it   was    we  m  Iht 
have  been  almost  twelve  months  further  along  with  at  last  on 
government   fabricating  shipyard.     But  it  is  scarcely  f a  r  f o 


294         INFLUENCE    l.F    THE    GREAT    WAR    ll'ON    SHimNG 

anyone  even  in  retrospect  to  censure  the  President.     It  goes 
rather  to  the  presidency.    The  President  must  foUovy  l)ul)hc  opin- 
io,,    It  is  most  difficult  or  indeed  impr.ssil)le  to  say  Nvhat  pubhc 
onini..n  uas  in  the  autumn  of  ll»l<i.     Perhaps  the  Pres,dem  read 
j,  .^ri-ln-perliaps  he  (hd  not.    So  yve  may  push  responsil)d.ty  for 
our  delay  in  startinji  .,!/i,lnnldinp:  farther  hack  even  than  the 
PreM.Ient— to  the  American  people.     It  is  difficult  for  a  gre?t 
elect. .rate  to  understand  world  politics.     It  is  possibly  true  that 
this  nation  reelected  vVilson  in  1010  because  he  "  had  kept  us  out 
of  war."     But  after  war  was  declared  we  did  not  take  it  se- 
riously     Men  of  national  reputation  advertised  boldly  for  the 
continuance  of  "business  as  usual."     Most  of  our  press  main- 
tained more  or  less  of  the  same  point  oi  view,  for  more  than  a 
year      As  a  people  we  failed  to  heed,  and  therefore  as  a  govern- 
ment we  failed  to  act  on  the  potent  policy  described  in  the  wise 
words  of  Mr.  BainbridRC  Colby  «f  the  Shipping  Board,  address- 
ing an  audience  in  the  Philadelphia  Academy  of  Music.  January, 
litis,  after  his  return  fr(jm  Europe  with  Colonel  House. 

This  country  is  in  danger.  I  tell  you.  it  is  in  danger. 
We  must  put 'the  ships  on  the  ocean,  oi  this  war  is  ost. 
Nothing  shouUl  .stand  in  the  way  of  shipbnildmg.  Ihere 
shouldn't  be  a  skyscraper  built  in  this  country,  not  a  rivet 
sboiild  be  driven' into  a  bridge,  not  a  girder  placed  in  a 
tunnel.  Every  automobile  ought  to  be  taken  from  the 
streets  and  every  chauffeur— and  all  of  them  are  good  me- 
chanics-should' be  sent  by  their  employers  into  the  ship- 

■"xo  candy  -hould  be  manufactured,  no  athletic  goods 
should  l)e  I'nade  or  an  automobile  turned  out:  we  shoultl 
do  nothing  of  this  sort,  but  build  ships,  ships,  ships. 

.\.  a  measure  of  our  failure,  we  made  700,000  pleasure  auto- 
mobiles in  1!»1T.  and  are  still  at  it  May,  lOlS,  after  the  Ger- 
man drive  on  .Amiens. 

In  lanuary,  l'.tl>.  .-ur  attention  was  called  to  a  specific  meas- 
ure of' delay— the  fact  that  the  six  months  needed  fur  a  ship- 
ping miracle  that  had  sounded  so  sweet  in  our  ears  the  previous 


SIIIIMUILDIXG    IN    Tin:    IXITED    STATES,    1 !)  1 4    To    lltlS       205 

summer,  had  passed  and  the  miracle  had  not  come.  The  miracle 
ua'.  Chairman  Denman's  proiMJsal  of  a  contract  with  a  bridge 
c.mpany  which,  after  six  months  preparati.jn.  would  launch  a 
.-..<»(•(»  ton  ship  every  workinj,'  <lav  as  long  as  desired  The 
money.  $7:,()..M.().0lM).  was  appropriated,  but  the  ships  did  not 
come  lorth. 


Enlar.jcmcuts  of  Priraic  Yards  in  the  United  States 

While    tlie    I'mergency    Fleet    Corporation    under    Goethals 
tapps.  and    Harris  dallied,  private  enterprise  pushed  forward 
wuh  speed.    Some  builders  reganled  the  good  business  as  assured 
tor  (ive  years  even  if  the  war  ended  in  1918.     Such  was  the 
conclusion  of  experts  who  prepared  a  report  for  the  American 
International  Corporation  before  its  purchase  of  the  New  York 
Shi,,I,ud,li„g  Co.'     In    Xovember.    1!.17.   the   Bethlehem   Steel 
Corporation,  which  had  gone  largely  into  the  shipbuilding  busi- 
ness through  the  purchase  of  the  Fore  River  shipvard  at  Quincv 
Alass     the  Harlan  &  Mollingsworth  yard  at  Wilmington.  Dei ' 
the  Maryland  Shipbuilding  &  Dry  Dock  Co.'s  plant  at  Baltimore 
and  a  plant  at  San  Francisco,  arranrcl  to  consolidate  its  ship- 
yards under  one  management  so  tha:  mey  might  eliminate  all 
duplicate  engineering  and  overhead  work,  and  adopt  standardiza- 
tion ot  design  and  centralization  of  labor  so   far  as  possible 
thus  permitting  the  greater  proportion  of  its  en^rgv  to  go  into 
the  actual  i,uilding  of  ships.^     Many  shipyards  were  enlarging 
their  plants  as  much  as  possible.     The  Glasgow  Herald  reported 
(December  2!..  I'.lT)  that  in  '.IS  months  up  to  the  end  of  1U17. 
$.5..1».u.....(K.O   worth  of  new  capital   had  been  authorized   for 
American    snipyards.      In  May.    lOlS.    Norwegian    capitalists 
announced  that  they  had  purchased  ground  in  New  Jersev  for 
he  construction  of  "one  of  the  largest  shipyards  in  the  world 
to  hudd  vessels  flymg  the  Norwegian  fiag  and  to  be  used  in  the 
American  trade."    One  of  the  finest  yards  in  the  country,  that 

;  UaWn,'   Rezli-iv,  January,    1917. 
liUiflay.  -N'ovenibcr  12.  \S>\7. 


-!'•'»  INKI.lKNlK    OK    TIIF.    GRKAT    WAR    II'dN    SIIirriNT. 

«'i  the  New  York  Sliiplmildiiij,'  lo.,  at  Camden.  eiilarRcd  its 
capacity  .'.(»  |)cr  cent.  The  diairman  of  the  United  States  Steel 
Inrporation  announced  to  stockliolders  at  their  annual  meeting. 
.April  1,"..  \uis,  that  the  company,  with  two  yards  ot"  ten  ways 
each,  one  at  Newark,  and  one  at  Mobile,  was  preparing  to  turn 
nut  line  >hi|)  every  ten  days  when  in  full  operation.  The  first 
launching  was  expected  in  May. 

The  Knglish  shiphuilding  world  hailed  our  success  in  phrase- 
ology not  common  in  British  discussions  of  American  shipbuild- 
ing: 

I  now  hear  that  the  Skinner  and  luldy  Corporation  ^ 
Seattle,  Wash.,  has  made  a  world's  record,  and  although 
only  commencing  operations  about  eighteen  months  a{^>, 
has  launched  a  steamer  of  s,s(i(»  tons  dead-weight,  dimen- 
sions 4L';i  ft.  !>  in.  by  .".4  ft.  by  2!i  ft.  ti  in.  and  to  steam 
11  'a  kn(its,  in  «!4  working  days  after  the  laying  of  the  keel, 
and  she  is  for  IJritish  owners.  Of  cour>e  work  was  carried 
out  night  and  day.  but  an  ordinary  individual  would  imagine 
that  what  can  be  done  in  the  United  States  and  Japan  can 
be  done  as  well  in  this  country,  if  the  men  and  machinery 
were  available.' 

Our  government  encouraged  output  by  some  relaxation  of  the 
.standards  prescribed  by  law,  but  it  is  interesting  to  note  that 
the  standards  for  lifeboats  were  made  more  stringent. - 

Epoch  III,     Tiik  Ad.mi.vistrators,  the  Me.v  Who  Do 

Promptly  upon  the  resignation  of  .\dmi'al  Harris,  Mr.  Piez, 
vice  president,  was  appointed  general  manager,'  continuing  to 
hold  the  office  of  vice  president.  His  record  was  a  good  one  in 
his  line,  that  of  scientific  production  engineer.  He  had  been  chief 
engineer  and  later  president  and  general  manager  of  the  Link 

'  Kditiirial.  I'air/'lay.  Dccfmlicr  1.^,  1917,  ii.  'J'>3 

Umdal  HuUctm,  May  28,  1917. 

'Mr.  J.  \V.  I'mvtll,  vice  prtsidoiit  of  Bctlikhcm  Stet!  Shipbuilding  Cor- 
poratKiii,  tcstilR-d  before  the  Senate  Cdnimittee  on  Commerce.  Febru.Try  1, 
th.-it  It  \va<  only  after  Tie/,  became  miKral  manager  tliat  experienced  ship- 
nnlders  had  had  adequate  opportunity  to  lay  their  t.xpericncc  before  the 
board. 


Belt  C;..,  ln,.I.l.rs  ..,-  Ial,„r->aving  madmuTv   f.r  Ina.Iin.  -uul 

mak  an    .,,  ,,.„,,  ;„  ,.1.  ,.  package.    The  plants  ,.fh^lL 
I.elt  (...  ha.l  hcen  Mcccas   for  engineers  seekin,.  cs:uupk    n^ 
P>o.l  praCK-e  n,  scientifK-  .nana«on,ont.  a;,h.,u«h  ,he^     '    J 
K.a,..  well  .„,a.u.  an.I  ha.l  n,.thin,  ...  .,..  .,,h' ,,  ."  -C, 
c-  .MUcr  Mr.   I.,.,  was  assisted  l,y  Rear  A.Imir  ,  I-Tancis  T 
-vie.  ,ass,s,ant  t..  ,he  general  n,a„a«er).  a  man  whos    rec.Il 
>   sn.,Iar  t.>  that  .t    Mr.    Fer«,son.      He   was    f.,r  a     L^e 
Im-    c<.ns.n,ct.,r  o,  ,he  navy.  f„l|,.we,l  I,v  eleven  ve  .r    nt  T 
^a    o,  .He  F..e  River  Ship,.uii.,in,  Co..  gui.^M     r  1^ ^ 
he  spnn,  ,,  ,„,  ^e  came  ...  Philadelphia  .n.n  Wa  hi  ^ 
■       e    har«e  o,  s.ee   cons.ruction  in  .h.  Philadelphia  .lis.Wa 

a!:.i:;s::rrd;:i.L^""'"^^'«^""-^'""-^'*''M>.^^^^ 

no  snsp,c.on  .,f  or  mention  of  p.,litics  in  L  ap      n.n^n  I 

Sllca'.:  "ir"   "'  '"^-^   --HM-acturin,  experienc'-and   a 
ivepuDiican.    ifc  is  a  man  ot  undouhted  nhihtv     w  •  "'"* 

dehvery  o,  s.eel  to  shipbuilding  plants.     It  is  said  .  at  .h.  V 
crnplain,  .Ih,„,  ,,„,„aBC  „f  mmeri.,!,  ''""  "■"" 

nl>nR  the  UaKuc  to  Knfnrce  fvacV,  f1?/c^    "  "■"""     -C'arlcs  AF.  Schwab 
1^  1918.     (Phila.!elphia  Public  I  eds^r,y'''  ='PP°"«"'^nt  and  his  hopes' May 


i'.tSi 


IM-I.IKNCK    OF    TIIK    CRKAT    WAR    I  I'ON    SIIIPrMNC. 


renter  "i  the  ;,'i)venijTient''<  -liiplmitiliiiK  ;'iiter|ir'»e'i.  As  Mr. 
Sclnval)'>  itJimeiliate  assistant  he  appuiiited  Mr.  Win.  <i.  C'ux, 
to  he  ihrectnr  tit  .shiphiiilthnj.;  for  the  I'hiladelpliia  district.  .Mr. 
C'u.x  is  a  real  ship!)nil(ler.  ha*. injj  heen  president  of  tlie  Marian 
II<illinf,'s\\(irth  Corporation  at  W'ihninjjton.  Del.,  when  this  en- 
terprise was  Iwmght  out  hy  the  I'.ethlehem  interests  in  I'.ilT.  be- 
fore tlii>  Mr.  (."ox  had  heen  at  C  ramp's  shipyard.  I'hiladelphia. 
He  had  worked  on  the  Clyde,  and  in  (iermany  where  he  had 
also  uraduated  from  the  German  Roval  Technical  Institute  at 
iieriin. 

( )n  .May  !•  there  was  created  a  new  vice-presidency  in  the 
l".inerf;enc>  Fleet  Corporation,  hy  which  Howard  C'oonley  of 
Hoston,  a  manufacturer  ami  hanker,  took  charge  of  lejjal  fi- 
nanci.-d.  auditinjj,  contr.ict,  statistical,  executive  and  admin- 
istrative divi-ions,  leavinj;  Mr.  I'iez  free  to  devote  himself  ex- 
clusive! \    to  shijjhuildinj;. 

Woiiden  ship  constructitJii  is  under  the  management  of  James 
L.  Heyworth.  twenty-two  years  in  the  engineering  and  con- 
tracting husiness.  during  which  time  he  built  the  harbors  of  Port 
Arthur.  Te.\as,  and  Fernandino.  F"lori<la. 


Slwrtaijr  of  Materials,  WIH 

The  actual  achievements  of  the  Shipping  Hoard  under  the 
third  epiich  have  thus  far  been  far  from  satisfactory  to  anyone, 
<lue  in  part  to  difficulties  arising  fnmi  the  severity  of  the  winter, 
and  to  material  and  lalxir  shortages.  December  1  the  fnst 
wooden  shij)  under  the  war  .-ush  plan  was  launched  on  the  Pacific 
Coast.  It  wa.s  a  boat  of  4,000  tons  dead-weig'.it,  2!»0  feet  long, 
built  in  the  record  time  of  Il'o  days.  Some  spectacular  starts 
were  made  in  December,  to  be  followed  by  falling  hopes.  On 
December  liO,  the  very  day  that  Admiral  Harris  resigned,  the  first 
rivets  were  driven  in  the  first  of  the  standard  fabricated  steel 
ships  at  Xewark.  In  l-"ebniary  initial  keels  were  laid  at  the  sister 
plant  at  Hog  Island,  but  a  month  later  nothing  had  been  done, 
and  the  Hog  Island  keels  were  still  only  keels  in  .\pril  because 


su.pn,n.,„vo  ,x  tmk  .x.ted  states.  IDH  ro  VM.     ,.,.» 

.•f  shnrtaRc  ,.f  material  nn.l  the  i.icumpletcess  of  the  var.l  for 
the  i)rcisn-ution  of  fh«.  ..-.ri-      -rt  .  •       '  ' "^ 

tuinon  ot    ht  uork.      Ilu-  actual  amounts  of  material 
involved  are  stiiDciK  fins      Mr    1."    ti    u-  ..  "iiaitriai 

>-,,rL-  <(,;  I  .,"'"";.""*•  -^'r-  '-  H.  Ri^r^r,  architect  rjf  the  New 
Vrk  .Shi|,lu„l,lm«  (  ....  Rave  the  lollouinK  fik'ures  for  nl  ^ 
t..  I.C  n.e,|  i„  the  Hog  Islan.l  contract:  ^  '""'""' 

.4ht^;:;;':;t!z«i%.s'U!;t;;[s^'*"i-'^^^- 

tota    of   l->o       Mn„,.  ^(  '         u         "Pa(l-\\ei>,'lit,   niakiiu'  a 

»'«'.  .-^  ;.".>.-h;.  1  ■  IT-X"  ',te"4'',':  "''«- 

Stc!    oloT"'"'  LoMRTon, 

Uoo,lw.,rk    ..': *'-2-7'cT^  370..K)0 

^l4y.(XM).(J00  6,,  5,),) 

Totals  ,  ,„_ ,, 

1.187.150,000  5.,,,,^,,^ 

^;:L!:;';:K;-„;r'i':;?:;,:';^:;S:-*«^ 

'H  .h,p>ard.     I-or  example,  it  was  reported  in  Januarv.^'  that 

"  ^eUy  Journal  of  ^^hifpUuj.   January  22  1918 


son         INH.I'KNvK    l>F    THE    GRKAT    WAH    ITON    •IIMPPtN'O 

1,00(1  cars  ..t  piling  fnr  ll..)j  Islaii.l  were  tied  up  in  IJaltimore. 
and  tiif  the  linic  at  least  cmild  imt  !«  moved  despite  their  iirfjent 
need  in  the  llnj,  l>laiid  mud. 

It  is  easy  tn  see  why  Mr.  Schwali  insisted  «>n  priority  of  steel 
for  the  shipyards,  and  also  wh\  he  i>,  reported  as  plannini;  to 
esrahli.xli  ai  the  lln;;  I>land  plant  a  three  in'inth-.  reserve  nf  ma- 
teria!-, and  to  attempt  to  maintain  it.  >.i  that  in  case  of  emer- 
gency the  luiildinj,'  can  j,'..  steadily  forward  from  this  stock. 

I'lie  Mtnatioti  was  Mmilar  with  regard  to  material  for  wooden 
ships  (ienetal  (ioethals  had  contracted  June,  I'.MT.  with  the 
Souiiu'rn  I'ine  .Association  for  1 1(»  million  feet  of  yellow  pine 
for  loo  woollen  ships.  Unfortunately,  however,  after  ships  were 
under  \\a\  it  was  concluded  that  .Mime  of  the  timl>ers  were  not 
Iarf;e  ennu;;h.  and  could  only  lie  secured  from  the  Pacific  Coast 
The  re>ultinj;  delay  was  thus  liitterly  descrilied  by  the  I'hila- 
«lelphia  I'uhlic  l.ciiijcr  editorial,  Xovcmher  :!.  HUT: 

Wooden  Ships  Without  Keels.  Shipyards  full  of  deck- 
jilank.  upper  timliers  and  finishing;  materials,  and  with  lar>;e 
timliers  f(,r  keels  officially  forgotten — that  is  the  situation 
revealed  nine  months  after  the  intensification  of  U-boat 
warfare,  eifjlit  months  alter  the  .American  declaration  of 
a  state  of  war.  four  months  after  the  retirement  of  Denman 
and  (ioethals.  and  the  jilacinj,'  of  Hurley  and  Lapps  in  charge 
<if  the  Emergency  Fleet  Corporation. 

On  .\pril  1.".  it  was  reported  th,-.t  special  trains  carrying  Uk- 
0(Hi,<i(Mi  feet  of  fir  timber  had  left  the  Pacific  Coast  for  Atlantic 
and  (iulf  shipyards  which  had  been  delayed  in  turning  out  their 
woiiden  ships  '  This  was  done  by  special  arrangement  between 
the  Shijjping  P.oard  and  the  Director  (ieneral  of  Railroads,  who 
c.\i)ected  to  get  the  lumber  trains  through  in  one-fifth  the  usual 
time.  In  another  month  it  was  expected  that  owing  to  another 
change  in  lumber  specifications  the  Atlantic  shipyards  would 
depend  upon  the  Southern  I'ine  A<>ociation.  and  would  need  to 
import  no  more  timbers  from  .icmss  the  continent. 

'  .^te  Chapter  VIII.  .See  also  Ferris  design  mentioned  above  in  this 
cliapter. 


.HHIPBtlLOIXti    IN    THE    I  NITED   STATES.    IIMI    TM    I'.MH      301 

The  scarcity  of  materials  show*  the  u  iMUm  .)f  our  firm  policv 
tn  Hie  neKot.ati..nH  uitli  JajKin  alxiUt  the  cxp..rfs  of  steel      ro'r 
n.an.v  m.„„hs  we  refioe.l  tu  let  it  «...  except  in  return  for  ,hips 
V  Inch  Japan  refuserl  to  ^rant.     After  months  of  neRotiation  uc 
came  to  an  aKreernent  in  the  last  week  of  March.  I'.Mh    w.iich 
ua^  of  mutual  henefit.    We  let  Japan  have  steel,  of  which  one  ton 
makes  .-,!.„,,  three  tuns  dca.l-weiKht  of  sluppin^.  and  Japan  agree.l 
I-  ^el    or  charter  two  tons  .lea-I-weiRht  of  shipping'  for  everv 
ton  of  steel,      ihus  we  ^ot  ships_l.%  ot  l;JO.(HK)  tons.  iMuiRht. 
I..  U-  .lehverea  .May  to  l)ecen,l.er.  ILIs;  24  steamships  of  l.'u- 
<'0U  tons  dea.l-weiKht.  chartered,  for  six  months,  delivery  to  l^gin 
April,   l!Ms;  :.':  steamships  of  234.000  tons  to  Ix'  delivered  in 
the  tirst  half  of  i;»i!». 


Labor  Suf>ply  and  Housing 

The  labor  supply  is  naturally  a  puzzle  in  a  countrv  sending 
men  to  the  camps  by  millions,  and  called  upon  to  double,  triple 
a.ui  ,|u.n.Iruple  the  numlnrr  of  workers  in  the  shipvard  and  other 
war  m<lustries.     The  process  of  standardization  o'f  ships  simpli- 
fied the  shipyard  labor  problem  by  making  it  easier  to  teach  the 
men  the  simpler  tasks.    Manifestly  a  great  manv  men  ha.l  to  be 
traine.l  lor  the  work,  and  the  Shipping  Board'has  gone  alH,ut 
It  in  a  very  systematic  way.     At  Newport  News  thev  set  up  a 
ar-reachmg  system  of  imlustrial  education  which  may  almost 
be-  calle<l  a  shipbuilders'  normal  school.       It  was  an  instruction 
trainmg  center  to  which  from  7.1  to  l.'.O  skilled  mechanics  were 
sent  .rum  various  vanls  for  a  six  weeks  course  to  learn  how  to 
teach  a  knowledge  of  their  trades  to  recruits  in  their  own  vards 
it  was  bj^nred  that  in  si.x  months  the  graduates  of  this  training 
schoo    woulc    be  m  a  position  to  initiate  7r,.mo  new  workers 
from  kindred  trades  into  shipbuilding.      New  York  State  and 
various  city  school  systems  also  opened  shops  and  schools  for 
training  of  shipyard  workers.     The  British  shipb-ilders  pointed 
out  With  great  satisfaction '  the  great  advantage      •  erica  had 

'  Fairplay,  May  13,  1917. 


no; 


ivn.iKVtK  i>K  TiiK  i;Br\T  WAR  imv  <4Hirpivn 


in  Ihi*  frmT(;riK\  l.fcaii»r  Iter  HliipIuiiMiii;;  I.it».r  was  not  ..rgan- 
i/i-<l.  and  tlurciorf  hail  imi  a«|.i|.ff.l  rt-.trictiv«:  rulci  ami  wa* 
willinjj  t.)  ii»f  machiiim  vi  far  a^  |Mis»ihlc. 

Om-  i.f  till'  M-ri-.u,  ItantlJcaiiH  in  tin-  laJNir  sitnatinn  has  l*cn 
Jill-  ali-ifna  <.l  h.iu»inj;  lacilitiiN.  Ilu-  Sliippini;  M.ianl  has  acted 
•  m  thf  avsumptiDn  that  thov  were  cloinjj  a  plent>  t.\  imttitiK  up 
nioiiex  f..  I.uil.i  >hip\ar<l'.  and  (..  !)nild  ship«,  ihc  shiplmilding 
ciinipanies  have  hcMiafnl  f>  hiiild  hmise^  fearing  that  ihe\ 
Would  Iif  idlt  nn  their  hands  when  the  war  is  i.ver.  Private 
lajiifal  han  heeii  sinnlarly  learinl.  ami  yar(N  have  acconiinKlv 
l>cen  idle  when  they  nn«ht  have  worked,  and  w-.rker^  have  in- 
curred e\i)ense.  distunilnrt.  daii^jer.  and  loss  <.t  time  in  ttiak- 
ma  |.,n>{.  tedious,  extremely  crowded  and  expisinj;  journeys  to 
remote  locations  almost  inaccessiMo  to  the  commuter,  hut  with  no 
place  of  residence  near  l)\. 

At  Newport  News  the  Shipping'  FJoard  threatened  to  rec|uisi. 
tioti  houses  to  prevent  rent  prufiteerin},'.'  f'or  the  Hoj;  Islaiul 
platit  extensive  harracks  were  laiilt  on  the  premises,  hut  In  no 
means  enoujjh  to  house  all  the  workers.  It  \\.,s  proposed  to 
commandeer  houses  in  Phila-lclpliia.  I.ut  they  were  all  occuiiied 
ami  the  opposition  was  t.x.  ijreat.  I'inally,  on  May  :.'.'..  I'.Us, 
the  i:merKency  Fleet  CoriK.raiion  Iw^an  to  build  sonie  houses  of 
it'  own    I.Mt  in  numher. 

Lahor  has  lieen  very  uncertain  in  the  shipvanN  because  of  the 
constantly  rising  pay  ami  the  constant  practice  of  the  new  vards 
of  stealinjj  labor  from  the  olil.  and  the  fjovcrnmcnt  stealing  it 
from  both.  At  last  the  Shipping'  I'.oard  estal)lished  a  labor 
adjustment  board  which  atte.nplcd  U:  rei,'ulate  and  prevent  these 
evils  as  far  as  possible,  for  midoubfedly  they  tended  not  only 
to  dis<,rf;anization  of  the  actual  work,  lint  to  the  jjrcat  de-truc- 
tion  of  ,-s^rit  ,/<•  corz-.v.  Throuj^h  the  sprnij:  of  liU's  there  have 
leen  distinct  efforts  made  to  create  amun<;  shipyard  workmen 
the  same  pride  that  prevails  in  a  «ood  regiment.  Bowles  and 
Schw.ib  and  others  have  made  many  addresses  to  the  men.  .\n 
inspiring  speaker  Dr.  Charles  A.  llatoii.  of  New  York,  went 
'  OtHciiil  huU.-liii.  May  4,  1918. 


«Hrfm-,u.i,v,i  i.v   riir.  i  xiTei,  jitateh.  Itiu  to  IIMt     ;io:j 
all..!,,  (r.^  y,r,\  ,.,  var.I  a.|.lrr.M„B  .nrrtiu^,  for  many  w^k. 
.  ..nnK  «h,r  ,  „.,.c  he  al.,,,..  a.Mrc-„r.l   I:.o..m,u  worker,  and  i, 

New   Nork  .I.H,r>c,  ,hat  l,a.|  |.«.„  ...r.m.R  „„,  .„  ,..„     ,  ,i,, 
r>r..n.p.lv  U«a„  ...  ...rn  ..„.  ,,;.  ,.,„,     .,,  ,„..,h„  ,,„„  /        , 

."  ruccrs  uh„  |,a.|  ..cen  avvn.Ki„,-  ;,m,  ,..  ,00  ,.    .lav  .tmu-l 
'•;     ..vcr     ,H„,.     ,,,,....   ,a,ni,.ar  wi.h  Ddav.aJc  Uiver  1 

mc  (May  .:..  „„.,  ,ha,  there  i,  a  .lis.inc.  charge  in  .he 
a...tu.U.  .  ,  the  u.-rknun  .ince  the  Cuming  of  Mr.  S.h«al,, 

•//..'  Khalry  for  Achiarmnt  and  ///.•  Kisin,,  ()utf>ut 
Tlurc   i.  nvalry  k-twecn  yard.   f..r  «.««!   recor.N-a   mo«t 
^'ok.,on,e  th.ne.     Apr.l  Jl   at    H  :  :.7   v.m.  ,hc  (.ram   Smi.: 

.'^.».  on  th     'A.llamctc   Kiver.  :.l  .lays  af.er  ,hc  laving  of 
••Keel,   wluch   was  aKree.1  ,0  !«,   worLl's  reconl   ,„„..      The 

h .;  ■  I'VV     ;  ;       ""  '""''  "  '■"  '^•'^■^■'"'"'  ••>  •^'^  ^^'^^^-^n.  ami 
uhKh  ha.|  for  SOUK'  tune  k-cn  held  i„  ,he  West.     ()„  .Sun.lav" 
".-n,„,^    May  .-,    VMs,   .hey  «.,»   i.   through   the  phenomena 
acluev..n,en.  .„  ,he  New  ^V.rk  Shipln,il.lin,\o.  of  (  an,.!  "    i„ 
^nc  m,  the  ...00  ..„  .,.„  ,.„,,  rua.lu.  in  the  unr::  I  ^ 

lam.clu.l  virtually  complete  in  every  .letail.  hoilers  in  place 
l^e  I.U.  on  k.,ort  the  vessel  is  omunis-ioned  ' 

than  ahom  two  and  a  half  months.'  '  ^"'''^ 


.'id  i 


tvri.i  iNtK  Of  Tiir  (inr.AT  w  \r  tp»)v  -.iiipriNT. 


In  .1  very  few  more  ilayi  the  I  mktiluw  w««  en  pnitc  on  the  high 
»ca«  wtih  n  carKo, 

Wholcoinc   ah.,   m    it'.   ri-.ttilN    ii   the    rivalrv    of    gaiij;^   of 

riveter,,    Uvaii^e    it    liririKx   i!ie   effort    rik'lu    down    to   the   in- 

Oiviilr  il   w.irkir.   ,itnl   ha'*  alrea'lv    lieconie   international.      The 

I'hila.lelphia  I'tihlU   L,<li/,r.  May  \>.  IKI".  re|N.rtetl  that  riveter 

Sh.K-k'.  rcoifd  of  .'.Tin  ruttt  in  nine  honrn  at  the  Ualtim-.re 

hry  l)t<k-.  \  Shipl>nil(|inK  lo.,  April,  liH**.  which  w.u  under- 

%Uh»\  |o  he  tinlaalal.le   l>y   hi^.   a«,.Kiaie"..   heltl   the   rfcnl    i.ir 

•miy  a  few  day?.,  when  it   wa-  l>ealen  hy   lulward  (iih-M.n  and 

crew  ..f  the  Federal  Shipl.nildiiiK  Co    at  ( "atn.leti.   N'.    I  ,  who 

drove  J.!»l»  rivets  in  s  honrv     lUit  the  AnurHan  recnl  vwm 

wtiit  t..  John  tarriKan  of  iH-troit,  with  .'l,n:..  while  on  May 

>«   till-    \ilantic  lai.Iv     fr.iiii   I.otnlon  ri'p..rted   'hat   -me    UolK-rt 

J-'arraiul  aii.l  jjaiij;  in  the  yardi  ..f  I'ra/er  it  Fra/er.  hanitnereil 

in   t.-'iiT  rivets,  or  one  to  every  7'j  seconds.      r>n  Mav  1.1  the 

recrd  of  \.i2J  rivtts  m  •>  liMiirs  was  in  Scotland      On  the  IHth 

it  was  hack  in  l!altini..re  at  the  astonishing  tij;iire  <>■'   t.^T.-,  jn 

!»  hotirs  hy  C  harles  Knij{ht.  col.ired.  who  hail  kept  -even  hel|M:rs 

Inisv.     One  week  later  Oakland.  Calif.. rnia.  elainud  the  record 

with  .'..f.L'u  rivets  for  a  jjan;;.   On  the  Jitth  ..f  Ma\    John  I.,. wry 

"f  I'tiKlaiul  claimed  7,s||   rivets.     I.unj,;  may  their  k.mkI  si>ecd 

continue.'     It   indicates  that  the  builders  on  iHUh  sides  ui  the 

Atlantic  are  K^ttinK  <lown  to  their  f;ait.  and  we  may  evfwct  that 

In  'he  end  ..f  the  -nninitr  Aimrican  shipliuildin>;  uill  Ik-  at  nearly 

fu;,    winjj.  with  output  at  a  sjxred  never  liefore  eipialed.-  althouRh 

tmiler?  put  nn  iN.ar.l ;  April  2^.  .Iirn  post  Iwiar.lr.I  an.l  «t.  rn  liih.-  ptif  in 
place;  .\pril  ,«l.  ma«t»  •ttp|>c<l  an<"  t•|l^lll«•  iiui.i||.ition  tnKun  ,  .May  2  fimnri 
[.til  III  plair;  May  4,  machinery  all  ...  placcand  .■nKinr«  completely  in«talled. 

pilttiiin 


ri.m  Ihe  twcnl>siMli   .jay   t.i'  laiiiKluii','.  itic  linn-    wa^   .KTcupied   in 
on  lini«liiiiK  luiiclio  "     (Philadelphia  /'i././i,    l.-diirr    .\lav   -t    I'ylK  i 

...    .1 1    I. „    I li     ■-.        .-r'    .     '     f,       ". 


S.im-  iay  ihcH-  c.ntcMs  <!.>  n..t  have  a  hcncficial  effect.  The  knowledge 
.»1  them  and  the  rec.ird.  mtiM  intltieiice  men  win.  have  Ik.  n  in  the  haliil  of 
doiiiK  l.iit  fr.im  M,  lo  -MKI  per  .lay,  hut  the  conteM*  are  of  o.nr.c  a  hil 
l.uatru:il  .yul  under  vep.    favur.ihic  circumstance*,  and  other  workmen  slop 


to  watch  the  »h.itt 

'  .As  (ir<...|  IS  lK-in«  rea.l  the  followiiitr  verification  come*  to  han.l 
In  the  I.' m..nths  rmle.l  just  now  (  Hi  a.  m ,  Septemher  .'Ot    \incrican  sliip- 
yards  have  hiiilt,  aii'l  the  Commerce  Department.  Bureau  of  Navigatj.  m    has 
cirticially  nnmhcre.l  1,950,455  gross  tons,  passing  the  jirevioui  high  re    ,rd  of 


I'Miriitii.nixcj  IN  TMK  isttuu  «r.uK«.  m\  to  ii.i^    ;ii,3 
the  lt..K  f,lar,.|  ,,|,m  »  not  «p«,c|  „,  ,earh  it,  ma»im.mi 

:;:";■:;";',  T  '-  ^^"'^"^"  '^^  ^•-'  -  •-"" 

.hint        .  ^T'"'"'  ''•*•"  '•'  •''''>'     ""•  ""^"r.u..a.e 

..  .»>  h;.v.  hern  .„..-unr,|  l.v  an  a«Kr..,Mv..  .-.n.l  ..menu  a.hnini,. 
n.   ,n  an.I  a.  ,,,  ,  ,«..  ,,„,,  ,^,.„,  .  ^^„^,  ^^^  ^^,  ,  ^^^^^  ^ 

pr..,luc...|  .V  a  ,K.oplc  "aMc  ...  |..,k  .hin^,  ,„  ,hc  fac.  I*,„re  ,hcv 
hi.  M'  in  ihv  faa  ■'•  ■ 

It  i.  Krcaily  I..  I*  rrRrr..e,l  ,ha.  .he  ,«•..,,!,.  .,f  ,hi,  cotmirv 
have  (*cn  ,l«-e,ve,l  l,v  a  grca.  many  nninf..r„,c.|  ..r  .ncrdv  Ih,„- 
»..-.>...•  ..a.enKm,  cn,K..n.inK  shipl.uil.hnj:  fr.,m  jK-r^u,..  ,hrv 
had  a  righ.  in  Ulicvc.  • 

TAi-  Board's  Policy 
When  ,hc  cxis.inR  priva.r  plan,,  ru.  K..j„g  fu„  ,p,«,.  ,he 

M     K..  a.c  in  I).  .en,l.r.  ,,M7     Mr.  .....y  |.„nl,  uh..  ha.I  u"' 

.  e  nunil...  ..f  .„e  .y,.,  .,f  .hipl.uil.lin,  ,.,  one  an.l  , he  :;:;.! J^ 
...  ^everal  yar.ls  „,  ,hc  Suu.h  similar  ,„  ,he  11..^  M.,,,,!  an.l 
Newark  yanls  ...  ,n,il<l  .hips  as  nearly  as  ,K.ss,l,,e  af.cr  .he  wav 
la  ha.l  hu.tt  au...m<.h,le*  wi.h  ,uch  as.onishinR  s,H.e.l.      f,   j, 

a,MhA':::;::,S:,r  ,1;^-::-;  hrr'-r^'"'^  -'- « 

year  I'll.V  "  '  '  '"'""'na  n>  all  iiatioiu  m  the  caleiirlar 

[ofiiuit   fiullelin.    May    U.   p    2. 

.'  Ihr   lahr.ratr,!  ,hip  was  h,.,Khed  MaV    0    li  x   V   '  *^L'  'v""'   . 
"i/hr  .Submarine  H„at  C..  '       '  ' "*    '"""  ""  Newark  yard 

lVac;!"May  IslTm.     '■"*"■■""  ^^*"'"-  "•''^^^^inrf  the   League  .o   Enforce 


no( 


>  tMI.lKNH  K    OK    Tin:    CKi:  AT    WAR    ITON    SIIIITINC'. 


nut  siiriirisiii),'  that  the  r.oaril.  tlien  ovcrwhelmc.l  with  imtiniOied 
ta>ks  and  railway  cnnf,'i'stinn.  should  have  announced  the  policy 
as  it  <hd,  jamiary  I'l.  I'.Ms.  df  encouraKinK  no  more  new  yards, 
luit  rather  to  enlarfje  tlie  old— thus  taking  advantage  of  existing 
orj-aiiization. 

As  a  part  of  this  policy  to  which  Mr.  Schwab  adheres  with  his 
announced  ambitions  of  three  completed  ships  per  day  in  the  sum- 
mer of  I'.M'.i  '  the  Xew  York  Shipbuilding  Co.'s  plant  announced 
in  mid  May  the  early  enlargement  of  its  very  excellent  plant  by 
beginning  uii  seven  new  wa>s  at  an  expense  of  seven  to  eight 
million  dollars.  These  are  for  high  class  ships — transports,  re- 
frigerator ships,  etc. 

The  success  of  the  concrete  ship  gives  added  force  to  Mr. 
Ford's  suggestion  of  more  yards  and  in  the  South,  and  sucii 
yards  are  in  prospect.     (  See  Chapter  VIII. ) 

The  United  States  (Jovcrnnient  has  a  Shipping  Board,  is 
spending  money  by  billions,  and  when  the  war  is  over  it  will 
have  a  big  fleet  and  some  shipyards;  but  we  should  note  that 
trom  the  standpoint  of  industrial  management  it  has  unikriaken 
no  new  function,  b'or  many  years  it  has  drawn  up  specifications, 
let  contracts  and  supervised  their  execution  at  the  hands  of 
private  builders.  That  is  what  we  arc  doing  now.  The  Ship- 
ping Hoard  created  the  Emergency  Fleet  Corporation,  which 
is  a  contract-letting  and  work-stimulating  body.  It  lets  con- 
tracts. Thus  it  contracts  with  the  .American  International  Cor- 
poratiun,  which  agrees  to  build  ships  on  contract.  But  first  this 
cori)c, ration  lets  contracts  to  its  creature,  the  Anerican  Inter- 
national Shipbuilding  Corporation,  which  builds  a  shipyard  by 
subletting  to  Sti  ne  and  Webster,  and  many  other  experienced 
contractors.  The  American  International  Corporation  gets  its 
shipbuilding  knowledge  by  buying  out  the  New  York  Shipbuild- 
ing Co.,  Camden,  \.  J.,  one  of  the  best  "enterprises  of  its  kind 
in  the  United  States.  On  its  executive  side  the  role  of  the  govern- 
ment has  not  been  changed.  It  is  merely  a  contract  letter  and 
a  suljsidizer,  and  even  in  this  it  is  going  on  patriotism  rath»^r 
'  Philadelphia  1  ublic  Udcicr.  May  17,  1918. 


siiipp   r.uiSG  IN   tut:  vsited  statks.  1914  to  1!)1S     ;i07 

than  ...  a  mere  hi,  ;.,ess  basis.  Everyone  knows  that  Messrs 
Miir/y,  f'lez,  S.  h>  jb,  and  scores  of  others  in  the  large  and 
rapu  ,v  ..r.ui.u,  st;  J  of  the  Shipping  Board  could  make  mure 
vioiiry  at  s.,mcil....g  else,  but  n.,t  more  srnicr. 

It  is  scarcely  reasonable  to  hope  that  business  can  continue 
nulehmtely  on  that  basis.     Jn  the  background  of  the  field  of 
governmental  enterprise  stands  the  haunting  ghost  of  unsatis- 
factory pay.    The  .American  legislatures,  high  and  low,  are  prone 
tn  thmk  of  governmental  pay  in  terms  of  average  men       The 
result  .s  that  the  needed  specialist  can  get  more  pav  elsewhere. 
A  ninst  e(,ually  bad  is  the  fact  that  the  civil  service  is  a  place 
where  the  man  who  has  failed  can  often  get  more  than  he  is 
worth  uutSKle.     As  an  advantage  on  the  other  si.le  is  standardi- 
zation, an  mdustrial  principle  of  very  wide  application  which  aids 
governmental  operation  of  industry,  especially  production    be- 
cause of  the  uniformity  of  its  conditions. 


CHAPTER  XI 
Shipping  Policy  after  the  Great  War 

Snii'i'iNO  Situation  at  Km>  of  War 

The  war  promises  to  end  with  the  jjovernnients  of  the  leading 
maritime  nations,  the  l'nite<l  States  and  the  United  Kingd(jm 
especially,  in  possession  of  large  fleets  of  vessels  and  in  control  of 
governmental  and  private  shipyards.  There  will  proJKihly  (  almost 
certainly  )  follow  a  ])eriod  of  continued  governmental  shipbuilding 
and  ship  control  during  the  continuance  of  ship  scarcity  and  the 
great  hoom  of  reconstruction.  Then  will  come  overproducti(jn  of 
shipping,  unemployment  and  lo\v  freight  rates,  very  low  freight 
rates.  In  that  day  whei'  anyone  can  get  all  the  ships  he  wants  at 
less  than  cost  we  will  he  in  that  position  of  economic  balance  in 
which  we  can  sit  down  calmly  and  consider  permanent  policy.  The 
war  will  then  be  over — so  far  as  ship  work  is  concerned.  What 
will  we  want  with  regard  to  shipping?  The  answer  is  simple.  The 
trading  peoples  of  the  earth  want  cheap  ships,  and  plenty  of  them, 
always  at  their  disposal  for  a  reasonal)le  hire.  The  getting  of 
what  they  want  is  not  so  simple  as  the  stating  of  it.  In  a  war- 
free  workl  this  abundance  of  cheap  ships  is  exactly  what  we 
would  have  and  also  it  is  surprisingly  close  to  what  we  did  have 
for  a  quarter  of  a  century  prior  to  I'.il-I. 

Tm;  Idkal  Ari<an(;i:.\ii;.\t 

This  ideal  arrangement  of  shipping  would  mean  that  the  nation 
or  nations  with  the  most  abundant  capital,  and  therefore  the 
nations  willing  to  lend  most  cheaply,  would  build  or  pay  for  ships; 
that  they  would  be  niannetl  by  the  men  of  those  nations  who  are 
willing  to  work  for  the  least,  and  that  this  cheap  capital  and  these 
cheap  workers  would  enrich  us  by  their  inexpensive  services. 
They  would  go  anywhere.      In   fact  these  ships  would  be  as 

308 


S,„P,.,v,-.    VnUCY    AFTRR    T..K    CRrAT    WAR  .no,, 

^;;;r;.:;T"t:;!:;7:H 

ec,nippe,l  with  cap  r^  .^i  ^^;'';  j^^'  '"  ^  '''^-  --""^  ""t 
owners  have  nJl  fh  "'^""' '"•, f "''  '■''«"•.  to  Ik-  natural  ship- 
Clnnter       t  '  ^■^■';""""^-'''">-  ^"ificial  means  .lescril.e.l    n 

'  .h  r  en  1       '  '-n;'"*  'T'"";''  ''"'P"^"^'  '"  ""^  "^  --  - 

..-;..■  ™rpl,.  ,,ipp;„,  .„,.,  place,       '.','„.    ™':r,h 
«orI(l  to  meet  its  shippin-  nee-ls   .'...f  .  "^posal  of  the 

n.Kl  wharves  has  wTpC^lt  th    fi     '"'•"/  '"  ''""''  "'''""^^^ 
posal  of  the  same  people!  '  ^'^  '"■'"""^'  ""'  -"-^-^'  <"- 

=lJfaSxr;;r.-:;r^^^^^ 

uilIir-rto,lnM,;.         •  ""/'""  '"  "^'cle.  and  are  indefinitely 

neutralize,,  JorU  if    "   ;     '    'i        r/''l'"  '"  "  "'°"»"^'"-' 

orce.  .s  perhaps  hein,  enhanced.     Certain      ,e'  IT  T 

>n  economic  and  maritime  poHcv  hns  T  ,        ^^'''"' 

■uiue  poncy  has  assumed  size  before  «n- 


.•!li> 


IMI.IKMI-.    OK    TIIK    CHKAT    WAR    fl'DN    SIIUM'INC, 


(!iiMi]if(l.  with  iiati..iial  ^iiipyanls.  national  tlccts,  ami  alis.iliue 
iiati.itial  onitri)!  of  Ixitli  yards  and  tk-ets. 

Tin:    lMIM)SSHill.ITV   Of    (Jl-.M  Iv  \l.    XaTIONAI,    I.NDKI'KMlKMi:    IV 

Sllll>I'IN(, 

Whcti  tlu-  imi)erativ(;  nml  i(,r  the  iiatmnal  pi.licy  lia>  pa^td 
slMiild  wi-  have  liopt  for  national  independence  with  rej^ard  to 
.ships,  and  it  so,  what  does  it  involve:-  The  answer  is  rather 
surprising'— double  or  more  than  doiihle  cost  of  freight,  duplica- 
tion of  llcets.  idleness  of  ships,  and  over  half  tlie  world's  vessels 
rnnniii),'  empty  all  the  time. 

1  once  saw  two  perfectly  staked  and  ridered  rail  fences  par-ilel 
t..  each  other  at  such  a  distance  apart  that  each  came  up  exactly 
to  the  ed},'c  of  adjoininj;  pieces  of  land.     It  was  called  a  "mail 
lane  "  liecanse  nei>,di!i()r>.  ha\  inj;  (piarrelcd  (jver  their  fences,  built 
each   his  own   perfect    fence  besiile  his   neij,dibor's   with   barely 
room  t.i  walk  between.     Similar  mad  lanes  of  the  sea  are  in- 
volved in  complete  maritime  independence.     It  would  mean  that 
ail  .\merican  exports  to  Hritain  went  in  .\merican  ships,  which 
could  get  no  British  carj^ci  cdining  back,  for  that  must  be  carried 
westward   across   the   -\tlantic   in    liriti.sh   ships,   which   in   turn 
cculd  .i^et  no  .\mcrican  car-;o  coming'  back.     Thus  we  have  {guar- 
anteed one-half  the  world's  ships  always  empty.     Add  to  this  the 
fact  that  there  is  already  a  very  c<jnsiderable  movement  of  empty 
•ships  because  trades  are  unbalanced  and  we  see  that  six-tenths, 
probably  iw,  per  cent  of  the  world's  sliippiiifj  would  be  running 
empty  under  this  condition  of  nationalistic  independence.      Per- 
haps that  SMunds  fantastic,  but  nationalism  has  already  made 
niaiiy  a  .ship  run  empty.     It  has  already  established  mad  lanes 
of  the  .sea.     To  find  a  perfect  example  one  need  go  no  further 
from  home  than  our  own  coasts  where  our  coastin.g  trade  is 
normally  reserved  Ijy  statute  to  American  ves.sels.  while  fcjreign 
vessels  in  unending  procession,  empty  or  partly  emptv.  skirt  our 
shores  from  Xorfolk  where  they  coal,  to  Galvestcni  and  New 
Orleans  where  they  load  in  whole  or  in  part.     For  decades  the 
f.ireign  owners  would  have  been  delighted  to  load  them  at  Gal- 


'.n,i  ^u:(.  t        I  .      "•'"  "'C'«ii!>e  Her  owners  can   t«  st  Ii^r 

. "  1  sh  ft  her  ,hr,.u,.h  all  the  trades  of  the  earth      L'  X  M 

^r  entina  tarr\  these  prodncts  in  her  own  shins'^     ]f  „,    ,J,-,ii 
"Miel.s  <  f  surplus  gra.u.  makmc  about  l..™.m«i  ,„„,  „,  („,„,,, , 


■'!I2       iNM.i  I  \i  I    or    iiii:  <;((i  \i    \\\h   ii'iin   siiii-i'l.N'c; 

InilcNl  States  tn  in   u,  Mip-.lx   it>i.l|  with  >U.f|)Jr-  car,  despite 
the  tact  that  it  ust-d  nuiti\  (f  thtiti  hut  f.nir  weeks  ni  t!ic  year. 

It  Is  easy  tn  iiiia^iiiie  that  iiaiiMiul  exasperation  in  a  world 
with  sm-h  sliippinj.  maiia^eiiient  miyht  in.hicc  the  stroiijr.handed 
to  enter  into  harj^ainiiit;  enterprises  <nch  as  we  have  seen  so  forci- 
bly used  (hiring  the  trade  restrictions  of   the  war.      Thus  the 
potash  famine  which  apparentl>  can  It  ended  only  hy  shipments 
trom  the  (ierman  mines,  ^mvis  ( iennaiiy  a  stmnj;  hand  in  certain 
l.arKains.     The  I'.ritish  nioiH,p,.ly  of  West   lum.pean  coal  gives 
her  also  a  strong  hand  for  a  bargain,  Init  it  is  somewhat  limited 
liy  the  fact  that  there  is  also  (ierman  oal.     The  United  States 
tan  also  make  strong  prescntati<m  in  trade  bargain  hy  withhold- 
ing her  pelroleuni.  her  cotton,  or  her  phosphate.     Hut  any  such 
action  hy  any  ,.|  these  nations  would  he  a  most  unfortn.iate  sow- 
ing nf  the  -eeds  ..f  trouble,  for  if  the  war  has  .shown  us  a.ivthing, 
II  ba.  shown  us  the  difficulty  of  establishing  restrictions  on  the 
ultimate  destinati.-n  of  j^oods.     Complete  national  maritime  inde- 
pendence for  even  five  leading  nations  is  plainly  an  idle  topic  of 
discussion.     Xcvertheless.  we  have  that  enhanced  sense  of  the 
importance  ,-f  maritime  sufficiency.     What  will  ue  do  alxnit  it 
after  the  war  r     I  believe  we  can  safely  sav  that  we  will  do  some- 
thing to  guarantee  this  nation  more  ships  than  she  had  in  the  pre- 
war period,  and  .ither  nations  will  feel  the  .same  impulse. 


I".\CTORS  CoNTROI.LIXr.   SlIIPPINC.    POLICIES 

The  actual  policies  that  the  natir,ns  will  probablv  adopt  depend 
upon  tour  things:  (1)  their  prewar  past,  and  the  resulting  na- 
tional point  of  view  :  (  l»  )  the  intluences  exerted  bv  the  war;  (3) 
the  industrial  efticiency  of  the  government  control  and  operation 
of  industry:  (A)  the  conditions  of  the  first  few  years  of  peace 
during  which  the  new  maritime  policies  of  the  new  epoch  will  be 
in  process  of  formation. 

It  is  impossible  to  discuss  the  fourth  of  these  intluences  now 

because  it  remains  in  the  unrevealed  future.     The  same  is  rela- 

^  lively  true  of  the  third,  but  the  first  and  second  are  capable  of 


31. 

some  examination,  and  bv  exnWmi^„  .i 
I>1  .•iJ..nc-      Thi.  piir-u.iiB  iIk-  policy  ..f  („,„,■-  f,„r.-- 

;;'v»....u-e.L,  „:r::i;:;  :r,  ::;■::;;:•■■  "t;  ''rt  "■"""■ 

tlie  p(,p„l„„s  coasts  nf  F„rn,.„    ♦  '  "''''"''•  "PP"site 

^''e ....  a  pwnj:.:::;;^r  .:^tr''t r,'^^ 'r'^ -"^^^^ 

^•np'tal.     Jfer  emiKratinf-  .„„s  .r^,'  "' ,  ''"    '"''''•  '^""-  •'"<• 

t-nitics  for  investment  of     r\,  """  '"''  *^"'""'^''  'W'r- 

-"'-poly <.f .he's:  .1  ;?•:;:■■  ""^ ^^^■" '■-'"- --"--t a 

^•nterprise.  al.nost  n,..i.t  l.v  h  '  "f'''"^^""'^'^'^  I-"J?!ancr- 
"P  the  nation-s  leade  hi'  ' ?  .''^.^"  ^"^■^■'"'"^"^  -as  able  to  build 
«in>e  interests  .hat    t'ml  's  "        T!"*!  ""'  '^^^'^'"P  •"  ^er  mari- 

^ai.H  in  *ndividna,ir;;h- :«:;■:  :::::ri:';s;;'^^^ 

^ijsandt  S™;;S'  \'''''''  ^°  '-'^'  "-- 
"'."ecessarv  restnc  1  "  the.  '''  '^'''  ""'''*'"  ^"-^^  ^'"""i  ^11 
al'n^es  in  re  Jn     o  X  J      ^"^•^'■"nient  should  deal  with 

they  arise  SXlut^  dnrihf  Xl  '^V""'>""''"  ^'^'P^  « 
cottiply  with  harassinrmul  nnereJ'  ^  ^''^.'"^  "'^"^"■■^-  '° 
tionsiinHritishnortrn.       .•         "'■'^'■>'  ''"'^^  a"''  '-eiriila- 

^vith  us-  and  oversp.         "     ^^'P^  \vhich  come  to  compete 

'>ein«  free^rtoir       „,73:;- „^  -;^  J-  encouraged^,; 

tions.   .  Its  rthp  I        •  !•     .      ^"''  hampenng  restric- 

•   ^''^''^^^■^^^'^^''■'t'ons)  demands  have  been  for 


;H4  IVKr.tT.MI.    OK    THF.    flRI  AT    WAR    IPO\    SHIPPINO 

scope  for  individual  ctuTj,-)  and  cntirprisc— for  a  fair  field 
and  no  tavors,  And  the  Association  has  not  st.Hul  alone 
It.  pohcy  has  iK-cn  that  of  sh.powtiers'  organization* 
throughout  the  country.' 

F'ven  stronger  is  the  statement  of  a  [British  shiphuiUlcr  in  the 
same  journal,  Septemher  Ju,  i:ti7,  page  47:,'. 

There  is  really  only  one  way  in  which  the  state  can  assist 
shipinnldniK'  an<l  ^hipping  as  well.  That  is  not  l.v  active 
control  ot  any  !<,n,|.  „ot  l,y  trying  to  direct,  and 'manaL-e 
and  Loss,  init  hy  reniovin^r  restrictions,  restori.if,'  the  lihertv 
which  has  ha<:  to  he  sacriticed  temporarily  in  the  interests  of 
national  weltare.  and  l,y  following;  .leliheratelv  and  consist- 
ent y  a  policy  ot  setting  the  science  and  art  of  shipl.uddinc 
an.l  marine  eiiKmecrin-  free  to  develop  along  their  own  lines 
It  should  Ih;  a  contmu.,u>  policy  of  knocking  off  shackles  not 
ot  htting  .in  new  control  levers.  Just  as  soon  as  it  is  proved 
that  anything  is  hindering  progress  a  strenuous  attempt 
should  he  made  to  have  that  thing  consigned  to  lii.storical 
ohlnion— whenever  this  can  he  done  consistently  with  na- 
tional interests. 

Probiihility  of  Coi  eminent  Aid  in  Future. 

It  is  probably  true  that  the  love  of  in''-nendence  had  caused 
these  statements  to  be  rather  stronger  th  .n  the  facts  warranted, 
for  the  figures  of  British  trade  and  .hipping  for  the  period  before 
the  uar  showed  signs  of  change  which  .she  could  scarcely  view 
without  some  concern.     For  example  Ix'tween  the  years  llt04  and 
ll'i;i.  the  percentage  of  liriti>h  trade  that  went  in  British  ships 
declined  from  r.j.H  ,,cr  cent  to  .--ti.l.-,  per  cent.     Between  1!M>4 
and   liilL'  British   foreign  trade  increased  .-..".  per  cent;  that  of 
other  countries  ir.creased  71  per  cent;  Briti.sh  mercantile  tonnage 
increased  i'4  per  cent  and  that  of  ,,ther  countries  increased  4.". 
per  cent.-'     In  view  ..f  these  decline,  before  the  war  and  the  well 
kno«n  destructions  during  the  war,  the  question  very  naturally 
arises,  "  W  ill  the  Briti.-h  continue  their  policy  of  let  alone  in 

'  fciiV/'/dy.  October  4,  1917.  p.  .'i49. 
'  Ib'd.,  SfpirintKr  J7.  1917.  p.  Slj. 


S„„.,.,Nr:    POMCY    AFTER    THE    CRrXT    WAR  .115 

shippinj;  matters  after  the  war'"     Tt,-  ,.,  ■ 

"P.."  w„at  „er  rivals .,..,  r'L  .u^^r:^::^^':;:;^ 

war  .nay  ..  accepted  as  a  f..re,n.ne  conclusion      CertanK    h 
.  .sh  .Inpouners  who  have  ha.l  such  c.ntrul  ..f    hr      orl  p! 
trade  are  not  Kom^  to  relinquish  it  without  -,  s,r  ,. 
Kct  .t  l>ack  there  must  he  a  s  rucde        ,.r  ''  "^^^'^'Z""'  '" 

ending  |„„e  ;„,    ,.„.    ,,,":,,  '^''"'f'''''  '"  '''»^  >«^'-»«- 

^•1..!  per  cent  while  others  cirr  e<l  's'-      tk  "'''■"''  ''"' 

f-'.-.O.ood  sterliuL' "  for  «r  .    .•         .  ''   *''  deserve  of 

translated  ms  wa    fm  i   f""  "'  ""''.^r'^^^ '"  ^^  •"*^"  -  '-"^ 
of  the  miiitarv  war  "^  "'"^"^"'^■^'  ^^^^  ■■>^'^'-  t»^e  endin,. 

vessels  of  standard  design.  '''  '""'^'^^"'-^  ^>-  '^'^P'^^S 

German  Policy—Govcrmucnt  Aid 

place  in  .he  Trlfr  (>„  ■  ,"    ""  >•"""  '"  ""  »™n<l 

a-vay  f™  gZ'  ,  ,         'a„  'rLt';'..'''''?  ""-""'P^^ly 
'in».;...aH,.ca„.aM.H.Sl:H:-Ij;;t^r--S 

K.  R  Knudscn :  Glasoor.  H.-ralJ.  December  29.  1917.  p.  37. 


ni<'. 


isri.iT.xcK  ov  riiK  «;«K\T  war  i  cov  <tiiti>i>tNa 


tradi   i<,  Itriti'li  in|.,tiics.      Ihiritij;  the  «ar  <ifriiiatu   Ita^  Ci»n« 
tiiniMii^ly  atna/cil  the  wurltl  hy  the  ^tr<•||}rth  ami  the  erticietii-y  of 
her  national  oruani/atiun  a*  (h«pla>e<l  in  nnhtary  anil  ecnnMinic 
litV.  anil,  a-*  in  tinic?>  ot  |)eace  ^he  prepare.!  i.r  war.  mi  in  war 
<.he  i.  preparing;  f<.r  Jieaee.     .\«  early  a^  the  nniMIc  ,<{  I'th!'  it 
wa^  repiirteil  that  the  derman  j*hipping  line^  were  c.  .ihininj,'  t-ir 
lieiter  <iri;ani/atiiin  in  the  iM)>twar  pcriixi.  that  frcmi  Tuii.ouo  t-i 
>(»it.«MM»  t<.n<.  i.f  4ii|)pinK  ha.l  atreadx  I>een  liuilt  t^.  replace  losses 
of  the  war,  an.l  that  some  of  tin,  new   work  even  inchuleil  t>i« 
passenjjer  liner?. '     i:arly  in  the  war  there  were  consoli.lations  of 
fiernian  and  of  Knplish  lines  to  increase  erticieiuy.     In  Septeni- 
k-r.    i:t|7.   a  correspondent    troni    llainlnirK  reported   a<lvance 
pl.m.  of   the  I'ominission    lor    Iransition    I'xononiy— in  other 
wi.rds.  plans  for  postwar  economic  life.   The  commis-ion  hail  or- 
ders       ■  cancelation  of  ail  old  vessel  charters,  and  that  all  new 
oiii,       ,,t  Ih-  suhniittetl  to  them  for  approval.     It  was  further 
ordered  that  ( urnian  ships  should  not  for  a  time  at  least  make 
voyases  between  neutral  countries,  such  as.  for  example,  hetween 
the  Lniteil  States  and  Ura/.il.  as  had  heen  their  wont,  Imt  th.it 
they  should  he  limited  to  national  service.      To  make  tUx-  ships 
more  effective  in  servin;;  national  need,  it  was  annouiued  that 
imported   luxuries  would  he  curtaile<l.  and   while  the  commis- 
sioners lamented  their  inaliility  to  duplicate  linj^hnul's  o.ntrol  of 
neutral  shippinj,'  through  hunkerinjj  privileges,  tliey  hoped  to  he 
able,  through  (ierman  coal  at    Hamhurj,'  and   Mremen.  t)  have 
control  of  some  Scandinavian  ships.     (Jermany  also  announced  a 
policy  <if  subsidizing  shipbuilding  after  the  war. 

I'nder  the  new  bill  subsidies  will  be  paid  for  new  ship- 
Intilding  on  the  basis  of  cost  of  buildini;  before  the  war, 
the  g..vernment  paying  a  large  jiercentage  of  the  extra  cist." 
From  till  to  ^o  per  cent  (jf  the  additional  cost  will  l)e  paiil 
on  ships  delivered  in  the  first  three  yeais,  I'd  to  40  up  to 
the   seventh   to   ninth   >ear.    .    .    .     \\  e  are   told   of   new 


uary 


;.l/,!r!)i.-  K,-:i,-7i\  Jul>.  191(). 

''  ';'.''  '.'II. o'^''^".",'  "^  German  ^hi^.^uihliIlK  plan-,  ,ce  OMaal  HulU-ttn,  Jan 
11.  Ivlo,  u.  12. 


illl 


fN<.    Pl>l,KV   AfTKU    Illf    ..HICAT    Wah 


.117 

yards  iirujectcl  .,n  the  KlU:  ....  tlu-  lUlti..   ..,,1    i       i 

•"  ••',.>  ex.cn,  whatever  a,  a  result  of  lLTar>  " 

A  /">/»„,;  A./U  V  „/  tn.  I  nited  Statcs-ProUclioH  fr.on 

(.  out  petition 

The  l-nitr.|  State,  ha,  .,een  a  cuntirnie,!  lanrNn.an  fur  fiftv 

>ears  .....re  the  war.     We  knew  ht.le  ,.f  the  ,ea  ex    ,  t    hnt    t 

wa.  on  the  map.  an.l  we  have  solemnly  trie.l  to  treat  ,  ,  i  Lh 

were  lan.l,  mennwh.le  .I.,Iay,n,  i„  ..ur  Ie«,sIatio„  ,h    «r  atlst 

KHurance  c„ncer„,n«  the  ...,„.,m.c  a,,.ec„  of  ,he  hfe  an" the 

-r.s.  u,H,n  it.     This  ha,  heen  tru.-  nl.t  only  of  our     .^ti  ^ 

«...  ...  th.  pui, ho  prmt.  an.l  the  curricula  of  our  universities     The 

.  >rn,nant  Msca    ,.hcy  of  ,hi,  v...  rich  countrv  ha,  lj„    i.  ,  , 

ourselves  fro,„  ,h.  eon,,.ti.ion  of  p,.,,.,,  ,,,,  f^,.,^,,  .  .^  , 
h    .  ourselves       1  h.s  protection  ha,  taken  two  forms:  f.rst 
prntectMe  tarm:  secn.l.  the  ,H.si,ive  e.xch.sion  of  the  fo ret 
..mselt  trom  our  shores,  in  so  far  at  least  as  it  has  apphe         I 
C  hn,aman.  the  most  efficient  «..rk.r.  »he  one  cinihll     f 
■n  ...e  .^test  num.rs  ,f  we  wouh,  pern:,  ^^^T^^'  'ZZ 
h.s  douh  e  protecfon  of  tarifT  and  excIu.,ion.  our  scantv  pop  h 
.o    u,  a  land  o,  unesan.pk-.l  r.ches  has  heen  contented  am    H 
UheM  our  attent.on  was  called  to  the  sea.  we  have  appe"  e      o 
be  .gnorant  of  the  fact  that  there  con,petition  re-Rner',      Je 

".t<.  the  realm   where  competition  realiv  does  prevail      [f  Z 
.narmmrpohcy  has  been  «uided  l,,-  desire  to  estabiisl     n     n, 
can  n,erchant  n.ariue  upon  the  sea  in  an.  volume  approa'hinn 
-vn  needs,  we  can  not  apply  anv  Letter  descri^?    Zt^  e 
than  to  say  that  it  has  l.en  childish.     We  have'tr,:!  "^o^:;;;: 

,^^;^'rrtay.  AuguM  30.  l.,7.  p.  300.     S.c  also  Londo,,  Uconon.s,.  July  .8. 


•IIH 


iNri.i  r\»K  nK  niv  ..Mf  \r  w  \ii  i  r..v  ^inrfiMo 


thf  |.r..tfci.v.-  t.iriff  i.lra  In  ,h,plnnl.ht.g  l.y  ..xung  that  n-  ,!,in 
>h..iil.l  H>  ilif  Ainvncati  tlaR  ui,U-.»  »b.  «a»  iHiilt  in  the  i  iiitcl 
>Uxic>.  which  miatu  hull  »ith  mat«i;.l  cn,ii„>;  ,„..ri-  than  .mr 
Krisii   rn.il   hntain  u.rs,  aii-l  t.)    m«-ii  whnne  wagr*  art  hijjher 
than  ih..M'  .,1  the  nirn  vU...  huil.l  thf  rival  »hip«.     fn  the  almt-iue 
"I  ail)  ..thfr  Kfcal  a.lvantaKe.  ihi.  Cart  al..nc  i.  (inal.     Thr  ^hip 
c.Mil.1  n..t  I*  hinlt  in  the  Atnt-ncan  .hipyani  ami  ha.  imt  l*rn 
iHiilt  t.,  aiiv  i;r»-at  cMcnt  \xhcn  it  ha<l  i.,  c.niprti-  with  the  \ar.l 
luitiK  rluMiHT  inatiriaN  an.l  dica|KT  laN.r.     ( )iir  >f..vfrnniirnt  has 
x.iinht  tn  toni|K-it>atc  tht»  .liM.1  vantage  In  making  the  further 
rt-lrKitnn  that  n<.  f,.rei»;n  l.iiilt  sf^^-\  ,hn„|,l  ,,1,    l^turrn  the 
IM.rtH  nf  onr  ..wn  cuntry.  tl  n-l.v  re>trictmK  ihc  cna^tinK'  tra.jc 
»..  the  exfKrnMvi.  American  vessel,  an.l  Riving  u»  i)cr force  etiouRh 
•«lnp>ar<l-  ti.  Iiuil.l  fur  our  uwn  coasting  trade. 


Ihmdiiii(<  of  Krstriitive  l.cffishUton. 

To  further  handicap  our  merchant  marine,  nnr  le{;i>lation  at- 
lempti.l  t..  protect  the    \mericati  workman  an.l  hiiil.l  up  a  naval 
perv.nnel  l.y  placing   further  co,tly   >atetjuar.l>  ahoiu   the  crew 
I  l.y  statute  largely  American  citizen^).     This  again  put.  I.e.ivy 
cost  han.lK.ip  upoti  file  American  vessel  that  uoul.l  comi>etc  upon 
the  liii;h  seas  will,  the  ships  nf  „ther  laiuls.     The  f..reign  ship 
•  s  tree  to  he  maimed  by  Chinese.  Hindus.  Italian^  Scandinavians. 
I'-ritish.  all  of  whom  work  in  their  home  countrv  for  less  than 
Atnerican  wages,  hut  the  American  ship  must  h.ive  a  la „e  pro- 
fM.rtion  of  her  crew  iiaturali/id  Anu-rHan  c.ti/ens.  thercl.v  guar- 
anteeing higher  wages  an.l  greater  cost.      Net  further,  the  more 
cspensive  stan.lard  of  livini;  prevailing  in  America  is  guar.mt.-ed 
up..n  .mr  ships  l.y  siiecitic  provisions  in  the  shipping  law  that 
the  crew  shall  have  (piartcrs  more  spaci.ms  an.l  therefore  more 
expensive  fhar      reign  ships  afTnrd  their  crews,  that  the  Ameri- 
can crew  shall  i  .ve  fo.„l  k-tter.  more  .aried  an.l  more  expensive 
than  aty.,r<led   f. .reign  crews.     All  of  these  handica|.s  in  crew 
give  the  followin-  very  interesting  comparison  of  .ictual  costs  of 
rutming  .,f  Uritish  ami  .\mericai.  steamers  at  the  outbreak  of 
the  war. 


F'T  an  Anwrifan  tramp  itramcr  »{  afKHti  i  luy.  . 

AN.ER,r  V.v  T«AMP  .STFA.X.FR  OF  ABOUT  4.0«,  TONS 


CinUtfl  . 

.M«lr    !.■  ■        

•''  '•'•ncl  m»*r  •'•■'•'•.,.,.., 

.   rfhl  ,„|.,M,  WJ  ,^h  

I  nirl  tngtnrtr  , ,, 

Hr«l  at«i<tanl    .....,, .p.. 

Sec.>n<|  ».,„tii„,         '."'■*"■'  •••• 

Third  3«<i.fjiii  ' 

Thrrr     ,lrr,,  #5ci,.afh    "" ' 

Nx   Hrrttlrfl.  tSt)  f  j,.(,  ••'•■. 

;*>'»  Ciial  paMer«.  *4<»  rwh 

J  (Mir  nthfr  mrn  al  *.IJ  rach 2*»fl0 

-.      ,  I"«>00 

rotal  waacs  for  .14  mm  r 

lo<M|  at  «  f,  f,„  ,  arh  ,H-r  ,|av  •I.HMOO 

^     .  •  ''<im 

*^T}  '"''  *•'«"  .'•"•  ••••"I"  l.m,   iFftU  M 

'.  •  '     .65 


(Vr    M.irtth 
l.llrtfn 
•l<)00 

mm 

LIOtN) 

woo 

NOllO 

70  cm 

I  so  00 

viooo 


^"««l  an     wag"r,  f„r' 1  V.m' . 
(If 


(^r  iw..  more  „„„  mus,  trfurn.Z.lT  '  "•*"  *"''  ""' 

BRITISH  TRAMP  STEAMEK  OF  ABOUT  6,000  TONS 

Caplam  ..  Per  .\fonth 

^la"'  .....■.■'!.■.■ ••■     I  W.OO 

.•"fi-ond  raatr   45  00 

Six  «ail„r..  *l7.5o  faefi .55 OO 

«  hitf  ciiBuirfr lOSOfl 

S«T..ii,|  (issjinrrr " 

Third   .iiKincrr    

Six  firt  men.  *I7,50  racli 

fc-iKht  more  nwn  at  »I7,50mc1i '"**> 

140.00 

I  otal  wage*  for  26  mri!  .  

Jood  at  J4  e.nts  each  ,,rr  day'  ".'.'.'.'.'.'.'.'.'.[[ 

Food  .i,„l  vvuK.  •*  for  6.000  fxis 

l-fH)dai,.|  was-.-,  for  I  t.m 

[ N'o  njicr!  or  c(«il  pa,«„  carried.| 

Mdnui-  Knifu,  October.  I9H,  |,.  j«i. 


7500 
57  50 
J8.00 


J<i90.50 
265.20 

"»o«70 
«      .16 


;ji'() 


i.NiLi  i:\cK  <iK  nil;  (;hk.\t  war  vvos  smii-ping 
Comparisons  witli  Japanese  operating  costs  give  similar  results. 
NVe  t(Kik  a  record  of  three  ships,  an  American,  a  British 


and  a  Japanese.     The  wages  on  the  American  ship  am 
to  S.i!>.24L';  on  the  British  ship.  $l.-..(i!M!;  on  the  Jaf 


)unted 
panese. 


These  figures  are  jiroliahly  extrcinu  Imt  true. 

Mr.  Xakahashi  Tokngnro.  ex-president  of  the  Osaka  Shoso 
Kaisha.  is  quoted  in  the  Philadelphia  Ledger,  Februarj-  1.5.  11)18, 
as  saying : 

Some  Japanese  appear  to  entertain  apprehensions  of 
American  shipping  competition,  hut  in  mv  opinion  such  ap- 
prehensions arc  entirely  unfounded.  There  is  no  need  of 
magnifyin.i,'  .\merican  competition.  It  is  true  that  America 
is  now  Iniilding  vessels  at  an  alarming  rate,  but  the  Japanese 
may  rest  assured  that  should  American  vessels  he  placed  on 
the  Pacific  in  competition  with  Japanese  ships  they  will  soon 
be  driven  into  a  corner. 

These  facts  help  to  explain  the  astonishing  absence  ^  of  the 
American  tlag  fnjm  the  high  seas  and  make  it  clear  why  the 
Pacific  Mail  Steamship  Co.  recently  sold  its  transpacific  vessels 
and  gave  up  the  competition  \'  ith  the  foreign  vessels  more  cheaply 
operated  and  also  .-ubsidized. 

.\fter  imposing  all  these  burdens  on  the  .American  ship,  the 
American  (iovernment  has  been  unwilling  to  make  any  financial 
equalization  by  the  payment  of  subsidies.  Therefore,  when  an 
.\nierican  needed  to  own  a  ship  he  would  usually  send  to  Eng- 
land for  it  and  have  it  registered  under  the  British  or  Xorwejrian 
flag. 

To  make  matters  worse  from  the  shipowners'  standpoint,  the 
La  Follette  shipping  bill,  ajjparently  aimed  to  protect  the  sailor 
against  the  impositions  of  shipowners,  has  put  in  provisions  mak- 

;  Mariiw  A'.-fiVr.'.  M.irrli.  1017.  p.  107. 

■  "  ['\  1,'^IJ  •1  total  of  2.593  vessels  entered  the  port  of  Buenos  .\ires-  of 
Ihe-e  1,.L'.-.  were  IjirIisIi,  SO  NOrweKiaii.  57  Dutch,  225  German,  202    \riten- 
tine.   183   Italjan,   15'>   French,   138   UruRuayan,  57  Austrian,  47  Spanish?  27 
l.razihan.  2.->  Swe.lish,  24  Mclfiian,  15  (ireek,  13  D.mish,  6  Russian.  2  Chilean 
and  2  .\nicrican.       {Marine  Riticn;  July,  1916.) 


shipping;  pdi.icy  akter  the  c;reat  war  '.i-2l 

ing  it  possihie  for  the  crew  to  leave  the  ship  at  any  port      It  is 
iinduiil.ted'y  true  that  there  has  for  a  long  time  been  injustice 
upon  the  sea  in  many  forms,  including  the  practice  of  shang- 
hanng  sailors,  or  .-orcibiy  recruiting  them  for  long  voyages  dur- 
mg  which  they  are  JKumd  to  the  ship.     It  is  also  true  that  the 
ship  captain  has  been  virtually  a  military  despot  in  his  little  realm 
l)ut  It  IS  also  true  that  in  the  operation  of  a  ship  there  must  be 
discipline  which  approaches  the  military  in  its  implicit  obedience 
Shipowners  arc.  liowever.  indignantly  of  the  .opinion  that  the 
present  American  statute  virtually  places  the  ship  in  the  hands  of 
the  crew,  and  that  as  long  as  they  are  able  to  leave  the  ship  at 
any  port,  the  vessel  may  at  any  time  become  merelv  a  passenger 
steamer  tor  the  crew,  and  tiie  problem  of  operating  her  is  great! v 
aggravated. 

It  is  easy  to  understand  how  all  these  provisions  for  controlling 
American  shipping  can  have  i)een  put  in  with  the  idea  of  afford- 
ing special  privileges  to  various  groups  of  peaple.  but  it  is  quite 
impossible  to  consider  them  as  having  been  enacted  bv  persons 
who  knew  the  conditions  of  ocean  transportation  and  desired 
to  extend  American  mercantile  marine  to  a  point  where  it  would 
be  able  to  do  any  substantial  part  of  our  high  seas  carrving. 
liven  Mr.  J.  P.  Morgan,  founder  of  the  long  unfortunate  Inter- 
national Mercantile  Marine  Company,  showed  that  he  did  not 
know  the  fundamental  facts  about  ocean  transport. 

On  a  par  with  the  above  evidence  of  the  American  lack  of 
appreciation  of  the  sea  is  the  recent  fantastic  claim  bv  an  Ameri- 
can journal  claiming  to  be  a  marine  journal,  that  we  should 
I)uild  ships  with  all  .speed,  for.  since  Britain  with  a  population 
of  some  4.-i.O0(),000  had.  when  the  war  broke  out.  20.000  000 
tons  of  merchant  shipping  we  should,  with  these  figures  as  a 
fair  idtio  of  what  a  maritime  power  needs,  have  somewhere 
between  40.000.000  and  50,000.000  tons  of  merchant  ship- 
ping—a  quantity  equal  to  the  combined  fleets  of  the  world  in 

Whereat  the   British   maritime   journal   Fairp(a\<  editorially 
made  merry  as  follows : 


:^  •->.■> 


INFLCENCK    OF    THE    GREAT    WAR    UPON    SHIPPIXG 

The  position  is  most  serious  for  those  wh..  liitherto  have 
snatched  a  precarious  livelihood  from  the  waters.  f(,r  with 
.lemocracy  ••all  the  vogue  just  now.  it  naturally  follows 
that  what  applies  to  one  applies  to  all.  And  what  does  that 
mean?  Just  this:  that  if  China  had  a  tieet  hasec!  on  "  a  fair 
ratiu  of  what  a  maritime  power  needs."  she  would  require 
steamers  aggregatinp;  200.000.000  tons  gross.  Russia 
would  trot  along  with  s.i.ooo.ooo  tons:  India  would  mop 
up.  on  her  own.  157,000,000  tons.' 

Merchant  Marine  of  United  States  at  Hei/inninj  of  Ifar. 

In  view  of  our  landsman  habits  and  point  of  view  it  is  there- 
tore  not  surprising  that  the  Great  War  found  us  with  a  good  fleet 
ot  coastmg  vessels,  an  insignificant  fleet  of  high  seas  carriers,  and 
an  almost  complete  commercial  dependence  upon  the  foreign 
steamer  which  served  us  on  all  coasts.  Promptly  upon  the  out- 
l.-reak  of  the  war.  ue  sought  to  take  advantage  of  the  misfortune 
of  our  neighbors  by  changing  our  laws  so  that  foreign  ships  could 
register  under  the  American  flag,  but  within  a  short  time  the 
oNvners  of  more  than  three-fourths  of  the  world's  shipping  found 
It  impossible  to  transfer  a  vessel  without  national  consent  which 
It  need  scarcely  be  said  was  rarely  forthcoming. 

Great  Britain  enacted  such  a  law  on  February  1-'  191.V 
Austna-Hungiiry  issued  such  a  decree  on  .\ugust  -'7  Den- 
mark on  Octol3er  s:  Germany  enacted  such  a  law  on  October 
21.  France  on  .\oveml)er  11:  Xorwav  issued  a  decree  on 
December  (..  Brazil  on  December  !..  and  Spain  promulgated 
a  law  on  January  '...  1!)1<;.  The  merchant  shipping  of  these 
countries  aggregates  ;5;J,!>00,000  gross  tons.^ 

The  fright  of  war  drove  this  shipping  to  the  American  registry 
inr  despite  the  greater  difficulties  of  operating  the  American  ship' 
the  h.-Ii  treight  rates  made  any  cost  seem  inconsiderable  These 
same  ireight  rates  made  the  shipowners  of  Am-ica  join  those  of 
all  other  countries  in  the  mad  rush  to  the  shipyards  clamoring 
tor  new  tonnage,  so  that  during  the  period  of  our  neutrality  our 

'October  4,  1917.  p.  554. 
E.  T.  Chamberlain.  U.  S.  Commissioner  of  Navigation. 


SHIPPING    POLICY   AFTER    THE   GREAT    WAR  303 

-Shipping  increased  substantially.     Then  came  the  war  with  tlie 
TZ        77  u    """"'■  ^"'"^'^  '""'^'"S  in  our  yards  for  foreign 

Zrdle       .        ■,  '"'"  ^''"''  '■'''"P^'«"  °^  "^''°"^'  shipbuilding 
egardless  of  cost  because  of  the  ever  increasing  menace  of  world 

domination  through  the  submarine. 

There  has  been  a  lot  of  loos,  talk  about  our  capturing  the  ship- 

bu  Idn,,  busmess  after  the  war.     Here  is  one  fact  for  fhe  perso'n 

ho  in.  that  behef.     More  facts  are  not  needed  although  thev 

could  be  produced.     Last  month  a  shipbuilder  on  the  Clyde  was 

paying  war  wages-"  bleeding  wages"  he  called  them,  of  Us 

Od.  for  a  certam  amount  of  work.    On  the  Delaware  the  builders 

were  paymg  .r.50  for  the  same  work. 

Our  Future  Policy. 

What  are  we  going  to  do  when  the  war  is  over?  Will  we 
eirshins"'"lV''  'r''"^^''^"^'  '-^'-^"   -"P<^>-lent  upon  for- 

d  fini  e  Ivt;  .h     "'      •  ""'•  "'  ''^""'^  ''  """  ^^^ig"  """elves 
fin.  el>  to  the  recognition  of  the  fact  that  we  can  not  for  some 

t-me  to  come  expect  to  be  able  to  build  as  cheap  a  ship  in  our 

yards  as  can  be  the  case  in  Great  Britain  ^ 

\V  hat  «.ll  be  the  policies  of  England.  Germanv  and  the  United 
Sta  es  with  regard  to  shipping  when  the  war  is  over  ? 

We  can  safely  say  that  we  know  Germanv  will  do  whatever 
•s  needed  to  get  ships,  several  million  tons  of  them 

^\hat  will  England  do?     It  should  not  be  forgotten  at  the 

with  a  1   Its  ni.ght  and  operating  them.     How  long  she  wni  keen 
oj.  and  u^^ther  or  not  she  will  stop  at  all  is  of  course  a  p  obtm 
On  one  thing  we  can  depend  with  great  certaintv.     If  ^una  dTd 
industry  can  not  put  British  ships  upon  the  sea.  anindustrv  aided 
by  government  will  do  so.  ' 

The  second  fact  which  we  should  place  alongside  of  this  is 

he  equally  unfortunate  one  that  a  Caucasian  dem'ocrac^^  such  a 

the  Lnited  States,  with  high  standards  of  living,  and  in    he  need 

o   trained  .sailors  is  not  likely  to  have  its  ships  manned  1-  Chi  ese 

Japanese  and  Hindus.    Therefore  we  may  expect  the  continuance 


324 


I.NKI.rKMi;    ni      rilK    OREAT    war    iro.N    SmiTING 


of  the  present  higher  cost  of  ojjerating  the  more  exi>ensivelv  Ijuilt 
AiiH-ncaii  ship,  in  ,,ther  words,  if  we  are  going  to  have  a  large 
merchant  marine,  it  can  not  grow  up  without  suhstantia!  govern- 
ment aid  of  some  sort.  This  is  th<  n.ore  hkeiy  l)ecause  of  the 
prol)aI)iIity  that  foreign  nations,  having  seen  the  vital  need  of 
ship.>.  w  ill  more  strenuously  than  ever  strive  to  develop  their  own 
marine*.  It  is  exceedingly  unlikely  that  we  shall  adopt  the  let- 
alone  policy.  The  nation  is  now  willing  to  pav  for  shipping. 
Therefore  the  real  question  is.  what  kind  of  assistance  shall  we  in 
America  e.xtend  to  the  high  seas  shipping  ? 

The  Methods  of  Aiding  Shipping. 

The  methods  are  all  described  in  Chapter  V.  Shall  we  have 
mail  subsidy,  voyage  subsidy,  mileage  subsidy,  shipbuilding  sub- 
sidy, government  ownership  and  lease  or  government  ownership 
and  operation  ?  Of  this  last  there  has  been  little  experience,  but 
mure  i)romise.  Canada  promises  to  do  it  after  the  war;  Aus- 
tralia is  doing  it  now.  and  has  tried  it  for  a  few  vears  in  times  of 
peace  with  lamentable  financial  results.  We  should  not  lose 
sight  of  the  fact  explained  in  the  last  chapter  that  despite  all  this 
war  control  it  is  not  government  organization  or  business  man- 
agement that  is  managing  shipping.  Government  is  merely  con- 
trolling and  the  men  of  the  business  world  are  doing  the  actual 
managing  and  operating,  exercising  the  real  business  judgment. 

I'ew  businesses  ofTer  less  inducement  to  government' operation 
than  operation  of  steamships,  either  line  or  tramp.  It  is  a  busi- 
ness of  constant  change,  of  the  Oinstant  exercise  of  judgment. 
Oovernmcm  businesses  are  renowned  for  their  red  tape,  and  for 
their  development  of  checks  and  balances.  They  must  advertise 
for  buls.  and  give  due  notice  of  changes  in  the  rate.  etc.  In 
contrast  to  this,  the  ship  operator  sends  a  long  cablegram  at  o 
P.M.  as  the  result  of  his  day's  business  and  observations.  He 
has  the  reply  in  from  London  or  Shanghai  the  next  morning  and 
makes  his  decision  on  the  .spot.  I  fail  to  see  success  as  likelv  to 
tollow  the  methods  applied  to  national  ship  operation  bv'the 
nephew  o{  Senator  So-and-so,  or  the  appointee  of  General  This. 


SHIPPING  POUOV  AFTER  THE  GREAT  WAR       .^O.', 

or  Cabinet  Officer  That,  nur  ye.  ,.f  the  ambitious  vn„n«  man  who 
has  passed  a  C ,  vl  Service  examination.     The  experSe  of  West 
Austrabn^  a  democracy  adnmtedly  progressive,  intelligent     n 
Thev  """"^  '''  Roverntnents  of  the  earth,  is  sugge  t  v 

They  ran  a  government  steamship  line  at  frightful  loss. 

CoMPucATtxc.  Factors  Controlling  Future  Sh.pping 

Policy 
While  wc  will  probably  ,Io  something  after  the  war  to  ^.,.r 

^:::::;^:^''  '-"-t  ''  ■'--^^^"  ^Hipp- ;:^- \::r^ 

rasn  to  predict  the  means  that  our  government  will  adnnf      Tt,  . 

Eulope."'"''  "'  '"'  "'"'"""  ^°"-'°"^"««  i"  America,  Asia  and 

(6)  The  state  of  international  relations 

(c)  Our  economic  problems  and  our  appreciation  of  them 

(rf)  Technical  transport  problems. 
Let  us  give  some  examination  to  each  of  these  factors. 

(a)   The  State  of  National  Consciousness 

Will  this  nation  legislatively  represent  largely  the  farmer  who 

says  th,s  overseas  business  is  none  of  our  afSir\nnvhow  a.  d  the 

thing  for  us  to  do  is  to  keep  out  of  it  and  let  the  f or  igne;^  ^ne ^ 

PC     V   r;  e  h':r  r  :■  'T™'  P^"'^^-  °^  worse.'a  cha  g^g 

ShT:     t  P'"?"/'  '.'^  '^'  ^°''  ^"''  i"dustrv  of  the  UnSd 


:y2ti  INFLUENCE   OK    THE   GREAT    WAR    UPON    SIIIPPINO 

Second.  It  should  maintain,  under  the  flag,  communica- 
tion with  distant  possession^. 

Third.  It  should  aid  the  national  defense  and  niaintiin 
connnerce  during  war,  whether  the  Inited  States  lie 
belliijerent  or  neutral.' 

It  is  highly  probable  that  we  will  as  a  matter  of  fact  have  a 
.strong  and  effective  desire  for  more  marine  self-sutificiency.  more 
maritime  independence  iliaii  we  have  had  in  the  prewar  period. 
Our  natiotial  attitude  m  thi>  respect  will  be  greatly  ctTectcd  by 


(b)  The  State  of  IntcrmUional  Relations 

Who  will  win  the  war?  What  will  be  the  conditions  of  the 
peace?  What  will  be  onr  attitude  toward  foreign  powers?  We 
must,  broadly  speaking,  find  ourselves  in  one  of  three  conditions: 

1.  Comi)letc  international  ease.  There  is  the  hope  that  the 
war  may  end  in  some  kind  nf  internationalism  that  will  enable 
the  nations  to  get  along  as  easily  with  each  other  as  vo  the 
American  States.  In  that  case  our  desire  for  independence  in 
maritime  policy  will  be  weak.  The  foreign  ships  will  do.  They 
will  gladly  fight  in  the  future,  as  in  the  past,  for  the  privilege  of 
serving  us.  We  will  let  them  serve  us.  Witness  our  South 
.American  trade  of  l!tl4. 

-'.  The  second  position  of  national  psychology  with  regard  to 
international  policy  will  be  nne  of  slight  international  distrust 
such  as  we  ha<l  in  the  prewar  period— just  enough  to  produce 
feeble  efYort>  looking  toward  a  merchant  marine— the  contradic- 
tory policies  such  as  the  prohibition  of  the  import  of  ships,  and 
our  other  policies  that  made  it  inii)ossiblc  for  us  to  have  -American 
ships  in  any  numbers;  fitful  >ubsidies  soon  withdrawn,  then 
shamefacedly  camouflaged  as  under  the  first  Wilson  administra- 
tion, when,  for  political  reasons  we  dared  not  say  the  word  "  sub- 
sidy." but  were  feeling  around  for  the  .same  results  with  a  policy 
of  government  owned  ships. 

Januao'"2s'"l9I7°"   -^'"''''*"*   ^'^'''"'•"  "^   •^'a<>'■"'•■•l    Foreign   Trade  Council, 


snu'i'isc  roLicv  vkter  tiik  c.hem  war  rjo- 

(.■)  £<v„„„„v  ,.„(,;,■„„  ™,/  o.„  .^/,,.,,-,/„„„„  „/  „,,,„ 
In  ihc  prewar  |«,riocl  »  r  fd,  small  nre„„re  veri  s„„ll  ;„,,     , 

stenm       ,    t  f    """'  '"""^•■>--     ''^'"^''-''^Iv  the  British 

steani'-rs  took  our  Kuods  to  Biienm  AiV^  -    "«^  i>niisn 

steamers  took  them  down  , hi  ^"'Y''^  '^«''»^'"^  and  river 

country  and  her       .^^      The":!;'"'  "'  ''' T''  ""'  '''' 

istered.  fleet  of  liners  sail  n^  fr,  m  N  w  ""rV'     '  '"T'"'  '''' 
,u,n^  o.  \-  1  -  *"  *^^  ^'"^'^  deposited  our  nro- 

cli.ce  at  Nalpara.so  ,or  the  Chilean  and  other  coasters  to  take     , 
sman  outports  not  reached  by  the  larger  vessels  of      s  line     b- 
one  transsh,p,„en.  .here  was  steam  navigation  from  New  York 
Nejv  Orleans,  or  San  Francisco,  to  aln.osV everv  port  in  the  world 

Th    P       •  u  ■      "'"  '"'■*^''^'"  ^^^iP  >^  ""t  here  to  serve  us 

The  Enghsh  registered.  American  owned,  lines  from  New  York 

of  he  Bruish  Government.    The  American  traders  are  taking 

Charter.     I,  ,he>e  Ime^  had  been  American  vessels.  thcN-  would 

^     n^  r:S  T         ""''  ""'^^^  ^^^^"^"-  ^'"^  ^^-ernme^t 
viKen  them  oft  to  serve  more  pressing  national  need.     We  have 


.■!2S 


INKLLKMK    OK     rill:    CMFAT    WAR    I   CON     SIIIITINO 


two  entirely  dilTercm  proI,Ien.s;  ,,„c  j,  ,hc  peace  trade  problem 
ami  tlie  otlier  is  the  war  trade  prubleiii. 

It  should  k-  added  aUo  that  in  this  particular  war  we  have 
tared  ktter  than  uould  |,..>Ml,Iy  he  the  ease  in  some  future  war 
f..r  the  reason  that  very  little  of  the  world's  shipping  was  enemy 
sh.ppmg.  a.ul  most  of  the  worlds  lleets  h-ve  sailed  on  It  is 
I'lani  that  the  tear  of  war  if  it  exists  is  a  mighty  factor  in  man- 
tmie  pohcy-even  the  wars  to  which  we  are  not  a  party  Rut 
It  we  are  a  party  to  the  war.  no  mercantile  policy  is  of  any  avail 
unless  we  have  naval  control  of  the  seas. 


(d)   Tcchuicat  Transport  Problems 

World  situations  hang  on  the  progress  of  invention  and  in- 
dustry.    \\  hen  Kmip.nvder  gave  man  cannon,  artillery  and  Iwm- 
l.ard,mnt.  ,l,e  w.dled  city  that  had  l,een  so  long  the  "recourse  of 
'"an  that  It  had  become  his  vision  of  heaven,  no  longer  suffice.l 
and  the  great  metropolis  has  become  wall-less.     Similarly  the 
mvcntion  of  the  submarine  has  entirely  realigned  the  worKI.  made 
over  man  s  thought,  destroyed  „Id  international  law.  and  brought 
America  into  the  war.     Future  inventions  in  many  lines  may  be 
equally  revolutionary   in   the  political  and   economic  policv'  of 
nations.      I  he  development  of  aerial  navigation  mav  upset  all  our 
present  methods  of  thinking,  an.!  utterly  annihilate  all  old  con- 
cepts and  practices  with  regard  to  the  application  of  national  aid 
o  maritime  affairs.     T!  e  old  policy  was  simple.     Uo  something 
to  get  ships^  then  build  battleships  to  drive  enemy  navies  out  of 
lie  way.     U  hat  will  be  the  neu  method  of  getting  and  protecting 
a  .leet  upon  the  sea.'     It  will  depend  upon  the  state  of  the  sub- 
marine and  ...  the  airship.     If  the  submarine  survives  then  the 
submarine  merchant  ntarine  is  a  natural  tiex,  step.      Shall  the 
"-chant  s  IP  o    the  epoch  „t  the  triumphant  submarine  be  the 

'Zt'  ZT'^r'^''''-  ^"'"^"'^'*^  '>P^'  -^  "'-  P'-'-'^t.  or  shall  it  i,e 
submei  Mble .-    1  he  answer  to  this  question  .lepends  upon  the  pros- 

fShri ''"'  "m  ""■•     ''  "^'""  """"  ""'"""^"^-  '^''  -"-face  ship 
'."ght  Ik.  worthless,  and  we  must  build  submersible  frei<duers 


SItlPPIN,;    P..I.ICV    AFTKR    THE    GREAT    WAR 


.•!2ft 


rh^  c  ^r^v.  h.tlc  rea,.,n  ,o  anticipate  that  a  suhmersihl.  freighter 
can  IH.  b„,|,  as  clu-aply  as  a  surface  freighter.  That  !«,„,, 1 
ca.c.  we  p<.ss.l,Iv  face  a  peri.Kl  when  the  private.v  own  ,1 
".ay  chsappear  except  fron,  cast  tra.les  whence  it  rnav  ."'ilv  rt  n 
«o  harlK.r  a.ul  lie  np.  an.l  in  its  place  ^vill  ,,  great  le/f 
expensive  sn,>n,arnu-  freighters  which  can  only  1.  tuilt  and  ,e  - 
.  .II.V  some  torn,  ot  heavy  government  snhsulv.  On  the  ..her 
f>and.  the  a,r,h,p  may  In.  so  c!evelo,H-cl  as  to  change  all  i.iel      ,, 


Continuation  of  Shipping  Board 
Certain  it  is  that  prediction  today  is  impossible,  and  we  must 
look  forwar.1  to  a  decade  or  two  when  we  mav  need  th      im" 
of  machn,ery  for  readjustments,  both  legislative  and  m  Te  ia 

o   ,^ie  ■'       T  '"""''"^  '''«•■'"  "f  ''•^^«'""  -hich  in  times 
of  peace  are  only  exercised  In  legislators  in  session.     This  mX 

on;;?memS?  wL'Sr"'  '"P^'"'^  """^-  --P<^«^ 

and  ^o^^'s:'T^:'i,::rn-'^::;-^,;;;  t;r' 

grass  such  revision  and  mo.Iernization  S  auS  te ,  st^'Se," 
^ws  re latmg  to  ship;  :ng  as  it  deems  necessar  .  and  shah  plr 
m.nent ly  discharge  all  the  functions  of  the  VaSl  en  ern 
nient  relatmg  thereto.  This  l)oard  shall  coni  ute  a^^  rn  a-" 
em  advisory  lx>dy  empowered  to  recommencl  to  gL  ess 
t  e  measures  necessary  for  the  maintenance  of  United  Ses 
>h  ppmg  upon  an  ewuitahic  competiti^  e  basis  u^th    thcr  na- 

Snct'Snchr'r/';""""^'-'!  ''"^  '"^  -aintenlnce  of 
.Vrin  view  ,h.  f  .  -''I'"*^  ""'^  compensation,  and  keep- 
iiiR  in  Mew  the  needs  ot  the  national  defense  and  the  neres 

iStel  t  "as^S"  'If'-     ^'^'^'-^  '"^'  '''"--'  ''-""  i" 
airected  to  a.certam  the  cost  ol  construction  and  operation 

rates  of  .uteres,  on  shipping  mortgages,  insurance  raTes     'c 

of  American  shippmg  as  compared  with  that  of  other  na^ 


aao       iNn.iE.Vii.  oi    riiK  i;kk\t  w  \«  ip<)\  siiipmnt. 

tinn.i.  an.l  if  nhoiil.!  |,o  iu  .fiitv  f.  .Iftermine  what  line  t>f 
ijcean-camiiiK  track-  ^haII  U-  |KTniaiu-ntIv  .Icvclopd  ,m,l«rr 
the  AnuTu-an  llau  tur  the  Iwiiftit  ..|  the  f-TciK'n  omimcrcc 
<.|  the  I  nitt'il  States  an.l  i..  reonmu-tid  methods  wht-rcby 
Mich  lines  inav  In.-  rctuleml  |ios.Ml>le.  in  the  event  cf  the  cost 
.'t  tneir  u|.erati..n  preventing;  effective  CMin|Htiti..n  uith  fnr- 
eiRti  wrvices  in  the  ■•ame  zuiie.' 

Ilic  Council  further  reconinicnded  that  such  a  board  shouUI  at 
«'nce  take  ti|>  the  tiue^tion  of  advising  concerning  revising  mail 
cuntract>  witlj  South  America,  South  Africa,  Australasia  and  the 
Orient. 

In  cnsidering  the  advices  of  this  .National  Foreign  Trade 
Council,  we  should  <,{  course  remeinlKT  that  thev  are  a  special 
group,  directly  interested  in  the  ilevclopment  of  ex'jM.rt  trade,  and 
therefore  gixnl  shipping  service  from  our  ports  is  essential  to 
a  continuance  of  their  business.  They  further  recommend  that 
the  President  l)e  empowered  to  sus|)end  the  I.a  i'ollette  Seamen's 
Act  pending  investigation  and  that  their  permanent  Shipping 
Hoard—  *'     ** 

shall  likewise  report  upon  the  measures  necessarv  to  render 
mvestment  in  American  shipping  safe  and  attractive  to  pri- 
vate capital,  and  to  increase  the  present  resources  of  .,ur 
systems  oi  credit,  as  hy  the  estalilishment  of  mortgage  hanks, 
to  supjily  f mills  to  the  shipping  industry  for  tinancing  the 
Construction  of  tonnage,  ami  to  throw  an'mnd  shipping  mort- 
gages such  protection  as  to  remove  anv  apprehension  on  the 
part  of  investors  regarding  ihe  satetv  of  shipping  proposi- 
tions, '  "     ^  f    f 


Mi.rnuiis  ov  M.mnt.mnixc  Amkkic.vn   Mercu.vxt 

M.VRINE 

The  -ame  Foreign  Traile  Council  says  that  "some  11,000,000 
tn  10,000  ooo  t,  ns  of  steamers  of  various  size,  and  types  w.mld 
U-  luvc- ;iry  m  carry  (io  p^r  criit  ,,t  the  (foreign)  trade  of  the 
L'nited  States."  - 

'  .I/,M)..,-  /vVr.V;.-,  Julv.  11116.  p.  247. 
•  Ibid..  Novc-iiibiT.  lyi7,  p.  JS5. 


»iiii'PiN«;  mil  r(  V  after  tmk  hhtat  w.\n  :v,n 

Let  II.  awimw  thai  we  will  maintain  that  nnicl.  .«-ean  mnnaKc 
Ihr.mKh  sunn  i.,rnt  „{  K-vcrnnict  aid.  \\>  ,hall  want  t..  avoid 
«a,ti-.  wc  .hall  want  t..  avui.l  uraft.  we  ,hall  want  to  av.,i.|  in- 
cdicrtuy.  \\c  must  av.-id  all  a|.|,carancc  ..f  favuritiMn  vrt  wc 
"n..t  Kvt  the  >hi|.s  an.l  have  them  run.  Iluw.  c..n»i,Icri..K  all  the 
inincacie,  „t  Anit-ruan  tx.litic*.  i-an  this  Ik-,i  U-  ,|..i)e' 

lifM.  K..verntnn,t  |..at.s  tu  the  l.mldcrs  .,r  operator,  of  >hl,,s  of 
a  ;^.ven  qnality.     Thi.»  i,  a  simple  and  casv  niethcHl.     There  is 

....thn,K  new  alK.ut  it.     I,  is  identical  with  .'.nr  a.|,.pted  icv  u( 

am,  loan  hanks,  which  are  l.nt  an  attempt  to  c „pv  the  practice  of 
Dn.mark.  (.ennany.  and  other  foreign  co.mtrics  which  pro,„ote 
the  l.mldmK  -•>  IH.rk  packinu  li-nves.  creatneries.  farmer'-  l.arns 
ditchc,.  and  all  knuls  of  aKricnItiiral  e.|u,pment  thro„f;h  the  crea- 
Jion  ot  orKamsrations  permittittR  with  Kovernnu-nt  aid  the  l.orr..w. 
.riK  of  money  at  a  cheap  rate.  This  metho.l  i,  sin.ph-  .,„.!  easy 
to  apply,  an.l  ,s  a  suhst.nt.al  assistance.  .dthonKt,  .f  we  maintaiti. 
as  we  undoubtedly  will,  our  ntore  exiK-nsive  crew  con.liti,,,,,  it 
will  prohahly  not  he  en<,UKh  to  enai.e  our  fleets  to  compete  with 
neutral  shipping.  ' 

Second,  we  can  pay  definite  In^nuses  per  to,,  ,o  American 
l.ml.lers  of  certain  kmds  of  shippinj:.  the  vessels,  of  co.irse  re- 
isfer.nK  tmder  the  .\,nerican  (laff  and  staving  there.  This  pr-.c- 
tice  however,  mii-ht  Ik-  expected  to  work  anumd  s.K.ner  or  later 
t..  the  Rovernment  ownershi,,  of  s).p  ,r<l,s.  Otherwise  so.neone 
1=*  hkely  to  Ret  cheate.l.  l„  one  condition  it  mi^'ht  \^  the  shin- 
hmkler.  tor  the  Kovernn.ent  mifiht  ^ivc  a  contract  for  the  huild- 
in>;  ot  a  lot  ot  ships  that  wouhl  .K-cupy  the  var.ls  -wo  or  three 

the  >a.^d  n„Kht  l,e  almost  wasted.  If  the  shipyard  owners  Ruanl 
themselves  a,,,,inst  this  by  adopting  the  practice  of  the  m.mi.ion* 
n.an.,tactnr,rs  who,  because  of  ,he  temporary  nature  of  their 
busme^s  ,,p,cted  the  first  Contracts  no,  onlv  to  p,-,v  profits 
l-"t  I'.-.v  for  th.-  plant  also,  then  the  j,n-ern.nent  is  pavi,!.  ,00 
""H-1^  '  r  -ts  .hips.  \„.,  if  it  p,,,  ,„„„^,h  ,.  ,^  „,^  ^^,^^-  ^^^ 
^•.de  the  .kTr.catio,,  f„„ds  to  pay  for  the  plan,.  ,t  ,.„  Ju  to  own 
the  i.lant.     Such  Rover.mtent  plants  mi.tjht  Ik-  ,  .perated  by  private 


Jtm^ 


3il« 


i.Nl't.rieNCK  ff    riif  t.ntst  u  ah  m'un   stiii>i>i.vo 


fumcrn*  juM  .m  i»mwl«.  «u»ma\»  stn<l  i,iilwav«  are  Mimrfimps 
imncili)  ,^)v.'r"  iMmt-  i.l  ..iwriteill.v  i>ri*;Ue  f.mi{ai,i«*.  •  ^k-Ii 
i»  the  ia«c  at  li.  I.  'ilaiii  twfcix 

ihir.l.  i;ov»riiMu,,t  .4  twrihfp  \  rhtr  |  me»h»«l  ..(  ,  ,  ,,tu>tiiti; 
-litlifniiK  >\..uM  '  ••  l.H-  111.  ^'uvrnitnrtit  Jd  ..wi  .hipv  »vhr.  '•.  miglit 
U  limit  iar  ii  t  I  Miirnci  in  it  own  or  prrvair  vanb.  .ml  hiw 
llif-e  *hijw  .  lit  •  i  -<:,.,.  ,  ,»ncr  to  ..|Kr.itt  tb,<m  iiii  r- imU- 
li"iiH  preHTi-  '  "crtKr     t.     Thi^  „„U.v,|  ,.  rir  i„,4icy 

•  •i  thr  prcH'in.  i  hr  >,.vvrrmHnii  i-  hinl.hnu  .hi|>«.  '  icy  havt^ 
al>..  l-.tiKhi  sh|,.  ami.  iti  th?  as-e.,  l.i  pnutici.  ar-  |w.Mnj{ 
them  nvt-r  i<>  miiivi.iwN  ?.  .^fjerat.  .n  time  <haii.f  .  ilii- 
mrthu,!  j«Tmit!«  \«*eh  tu  Ik  iiirr.l  u,  i..m|«nic!i  tiat  \t  ill  n-rer 
to  oarry  mail  ■  vrr  c«Tf.»iii  rout.-  u  n-ri.t  u  ^pet-.l  .t  iir-  ,  n  inter- 
vals.    The  siiiu-  a(iplies  to  trt'.    t  liuc-. 

Ihr  <|iie!»ti.i«  of  thr  iratttp  is  more  .litficuit,  i  can.  thf  ..p,  ra- 
ti.'H  '  f  a  trarnp  ma^  take  it  .in\(\»»err.  aii-l  it  tna  at  titTf*^  1,^  it 
Iwillast.  Th<  rreiiih  tnclli  kI  ..r  piitiinj;  tm  ■  upon  the  n^. 
h\  ]Ki\\nii  a  t  HleaKc  lasi.  lus  proven  .  I  very  (,ii<  .itic mhlf  merit, 
hei.iiioe  the  governmetit  has  artii;,;.'v  paM  i,  r  wha-  miRht  k- 
vallrd  a  pUM*ure  jaimi  inr  a  vessel  an  >rc\v  ^01111;  frmn  nowhere 
to  n-.ttherc.  at  Koverniintit  expense  rcause  ■■  .wh  k-t.er  than 
tyin^'  lip.  It  ^eems  certain  tlut  ,  ther  thr.'U»{h  loans  to  ouners, 
KT  Imil.linjr  siil»Mi,fie>.  or  cert.-finly  S.v  chartering  it,  own  ship  iIh- 
I'liiteil  Stales  (ioverntneni  iMul<i  nrethin-  t..  put  an  Am.- 

can  tramp  vvith  iis  exfwnsive  crew  .,     ,    n-uicial  paritv  with  il; 
C  hine-e.  Creek.  Scanilinavian,  .\    rwe.;4iati.  -.r  Mriti^h  t    .mp  u. 
Its  cheaper  crew. 

This  policy  of  f,">vernnif!U  ownership  in  which  rinRland  s 
Aineric.i  are  to<lay  enjiajred  iiay  easilv  c-uiinue  indetinitciv  ..  ,f\ 
crowd  private  ship-.  nt\  thf  hm.  for  if  naiional  rnalrs  once  -»•- 
started  and  wc  snl.-id  ze  to  the  point  wher.'  we  make  it  ditticni 
tor  titc  neutral  to  c,  :n|.ete.  th^^n  hi-  may  trt  to  vulwidize  an, 
make  It  iinpossilile  for  us  !..  compete,  u!  '«.s  «(■  raise  the  miU- 
si.lv.  riiiis  we  -nay  Ret  starte.l  on  a  pr  -<  that  mav  wind  ip 
with   the  complete   na'ionalism  ,if    the  ,   of     he    worhl   i^v 

making  it   impussibk  11  the  unsuhsidi/.         -p  t.    -ail.     h  ^ee- 


'fJH'i-io  pwtiev  JsrtfM  ritr 


'1^  (kfnlt    ,k 


'niiniuince  of  >r  ivernrrtciu  owncfbiiip  in  anv  Urgv 

ins  TKllinn..  it*  ,-.      iplctc  «l,.u.rp|i,.„  ,,f  ,J^  ,)j^,  ^„,^ 


■ftr»  fhan 


bir 


<m  I  «A 


hit  >i  . 


KTW 


N  MlVr  ()|>ICHA"i).V 


J. 


thM  rtnttltfion  there 


Vl)U 

-  or 


.y  iW' 


cm  !' 
-ha  I 

.of 


erimirm  ovm 
feasihle  matri 
•xwinl  III  *a\ 


lie  fx'intetl 

]i  aiut  j;i<v- 

!'r  the  gov- 

1-  i*  ih>   ta»« 


hat 
..f  ti 
is 


.  setiil  du'  >hi|)?t 


r!  flii:«  .»r  that  comnkMliii 

i!|»  «hi.<i  iiviiuh  t«j  this  rpsion 

that  other      -ion.      iknmh 


I        an  arm 

'"•«.     There 

iiete^sary 

It  opera- 

ons  and 

;;  ma.'f, 

1  liie  wiirUI's 


^  >>(  sires.*  nja>  even  net  i\  ,■  rate  .     ship    ng  as  they  c|., 
'  It  IS  i„  U  h..|)e(I  that  flu-  worKI  tmv  Ik  -   ^«  ne,|  from 
•HM.-..  «hen  lK)th  liner*  and  lranip>.  arc 
K'»\<-rnnient  hy  .tVicials  rathir  than 
inhere!il    impossihility      f    fn^ion    1h 
■ml  lialances,  juid  inevitable  red  tafie  of  , 
;»M     'mg.  and  the  endless  shiits,  nverni,^ 
'ii^-iffe*  oi     4ati  that  are  involved  in  that  world 

■     Mntsine-^    Kaine  of  chess  that  K'liules 'housandi*    _..^  „, 

sJup:,  t..  th,  hundre.1..  of  ,K,rts  to  n,ove  the  worlds' ireiKht"'it> 
r  -poHNe  to  the  ever  chan«tn^'  n.-.-.U  of  Imsiness.  the  whims  of 
.  .mate,  the  variations  due  to  the  faihires  of  crops,  and  the  plans 
of  men.  ' 

The  Po.stw  \k   Praxsition  Period 

V  ,  ma„er  what  the  ultimate  polity  of  the  United  States   her 
■llH-  and  erumies  ma>  he.  it  is  verx  safe  to  predict  some  'hings 
ai  out  the  pcruwl  of  tran^ftion  imme<liately  after  the  war. 

ILnormoits  Tnulc  .nui  Sliif  Sltortai/e 
It  will  Ik-  a  rime  o,'  enormous  trade  and  therefore  in   ,M  pr   h- 
ahdity  of  ship  .carciiv.     ikfore  the  war  the  world  was  gett  ng 


.134 


!MLri;.\ci;  of  the  great  wak  ii-ox  siiii'imng 


alung  uitl.  t.'.ooo.ouo  tons  gross  of  shipping  an.l  I.uilding  about 
-.(X'o.ooo  tons  per  year.  It  is  impossiulc  to  predict  the  tonnage 
at  the  clnse  ..i  the  uar.  hut  it  is  diftkult  to  >ee  h.nv  it  onild  Ijc 
anywhere  near  a.le(|uate  lo  tlie  war  needs  or  the  i)ostwar  nee.ls 
There  has  Ixren  huge  ship  destruction  l.v  war.  and  almost  no  ex- 
tcnsi.m  ot  peace  time  land  eciuipment.  Much  of  this  omitted  work 
IS  cumuhitive  an.!  uhile  the  estimate  of  a  iMcnch  comnnssi„n  tha» 
we  would  need  so.ood.ooo  ton*  of  shipping  after  the  war  is  proh- 
al.Iy  too  hit;h.  It  IS  quite  hkely  that  we  will  need  tiO.OOO.OOO  tons 
for  several  years. 

Continued  Control  for  a  Time  at  Least 

Kvcn  if  it  were  universally  regarded  as  desirable,  it  is  plain 
that  It  will  not  he  possible  at  the  end  of  the  war  to  return  shipping 
at  once  to  the  freedom  of  individual  ownership  and  control  of 
1!'14      Ihe  small  amount  of  shipping,  and  the  great  amount  of 
p.)ss.ble  freight  to  move  will  make  it  necessarv  for  some  compre- 
hensive intelligence,  then  as  now.  to  decide  what  trade  shall  be 
permitted,  and  what  trade  shall  be  prohibited.     Otherwise  we 
would  Ih.'  making  duplications  of  that  astonishing  episode  of  l'U7 
when  a  full  cargo  of  rhododen.lrons  was  taken  into  a  port  of 
I;rance.  fann'shing  for  bread,  meat,  cotton,  oil,  lumber,  and  coal 
I'or  many  months  after  the  last  torpedo  and  bomb  are  fired    the 
i^hippmg  controllers  and  the  war  trade  Ix^ards  will  continue  to 
control  the  trade  and  the  ships  of  Britain,  of  France    of  the 
L  n.ted  .States,  and  of  Germany  also,  as  alreadv  long  since  an- 
nounced by  that  thoroughly  planning  people. 

It  the  government  did  not  keep  a  firm  hand  on  shipping  and 
trade,  that  is  to  say,  if  she  gave  liberty  to  the  shipowners  who 
have  a  monopoly,  through  the  scarcitv  of  their  commoditv  it 
\you!d  make  sheer  robbery  of  the  public  bv  the  freight  rate  exac- 
t.ons.  and  the  crippling  of  industry  by  the  carriage  of  unessential 
liiMiries  at  the  expense  of  the  fundamental  national  supplies  and 
raw  materials. 


sniPrrNG  roucv  after  rnr  great  war 


335 


Possible  Natiomlization  of  Shipping 

"ilhom  „rio,„  injury  .„  anvil"!       /        •  '"* 

(or  .W,  ./  „.„,,,',„„  :,:,.r,ti„°;*  :  "Jj^-    So  „„ch 
now.     I,  i,  „„,  M      ,„  ,av  ,ha>  on    ha  1,?,^  """"' 

indeed,  IS  hard  to  Dredirt       wu      i.     , ,  '^"^"^  ^^  i""'     This. 
P.n„a„en„,  .,ep  ex'',;;':^  .„:^'  oX^.V-rST"" 

-ion  e.cep,  ,he  „ne  ,„  eff Jv»L  ■.,       .^  .H™  "t"  ""t 

mg  impossible  at  all  about  the  nation?  I...        "^  '"  "°^''- 

".Mv  and  even  opera^n^  1'::^  1/:^ 

just  as  thev  now  operate  warshin.  nl  !  '^^''^  '°''' 

ur.  ra..., ,  J.  op.:«:t":;;o«s;i:itr'  -  - 

threaten  to  increase  it  by  all  this  ncrmi«  on  ,   5  '  *"°"«''  °f  ''  already.     We 

foirnr"""  '■'^^'"'^  f™'"  the  UnTteT States  w«'r°T''°^  P'^  -""^  ^^"^"""^ 
1918  has  sometimes  been  worth  a  fnrf.fnf     v    ^"^  ^"^^"^e  Board  in  1917  and 

.nexpensue  commodity  at  ^government  '  nm°",.'°,"''*'.'°'  instance  buy  an 
pound.  Famished  foreigner,  stood  h,hnf°'L''^  P"«  °f  3'A  c^nts  wr 
18  cents  a  pound  for  it^  How  much  could  th".  "'"  P"'-"^«^  "'  P='>-i"g  >^u 
tlie  licenser  to  issue  the  license?  ^^^  unpnncipled  afford  to  give 


y.io 


IMLlKNCi;    (IF    Till-;    GRtAi     WAR    II'O.V    SHIPPiNG 


Period  of  Overproduction  and  Depression 

Tlie  sccoiul  tiling  that  may  t.c  predicted  alxnit  the  transition 
peridd  after  the  war  is  overpn.ductiiMi  of  shipping,  a  slimip  in 
rates  and  a  great  and  prohal)ly  prolonged  depression  in  the  world 
•  if  shipping.' 

Unring  the  postwar  famine  when  the  Uritisli,  French.  Italian 
an<l  American  Shipping  Hoards.  Controllers,  etc..  are  holding  the 
rates  down  by  authority  on  the  home  trades,  there  will  in  all  i)rol)- 
al.ility  he  some  Scandinavian,  (ireek  and  siirphis  Hritish  steamers 
w.ldcatting  on  the  sea  lor  the  highest  hi.lder.  who  mav  Ik;  our 
present  enemies.      The   freights  will  he   fortunes.      Evervhodv 
udl  |,e  tempted  to  get  s.jme  ships  tn  real)  ''h'  golden  harvest. 
Ship  owning  is  a  Inisiness  with  a  lot  ..f  the  gambler's  chance  in  it. 
It  woul.l  l)e  hard  indeed  to  find  another  business  so  speculative. 
It  IS  affected  b\   things  entirely  beyond  the  control  or  prevision 
ot  the  shipowner.     It  is  a  work  in  which  a  man  must  observe 
and  come  to  his  intellectual  conclusions  and  then  bet  his  bu>i- 
ness.  almo>t  his  whole  fortun-,  on  his  opinion.     Thus  in  July, 
1!>1<;.  a  man  ofifered  a  steamship  for  two  vears  at  21s.  <!d.  per 
tnn  per  month,  but  owing  to  the  then  scarcitv  he  insisted  upon 
haxing  .t.-.s.  per  month  if  the  charter  was  for  one  vear  only" 
In  March,   lit  17.'  a  charterer  offered  a  shipowner  Us.  per  ton 
dead-weight  per  niomh  for  a  period  of  five  vears  after  peace 
was  declared,  or  he  ofifered  him  Ss.  per  ton  per  month  for  ten 
years  after  the  war.     In  view  of  the  ,ict  that  4s.  was  a  go.xl 
rate  bef(jre  the  war.  tlese  figures  indicate  one  man's  faith  in 
the  long  duration  of  high  freight  rates,  but  it  is  onlv  one  man's 
faith. 

The  history  of  .shipping  during  and  after  the  Boer  War  -ives 
good  reason  for  us  to  expect  a  period  of  overproduction  of  ship- 
pmg.  with  unemployment  of  ships  and  therefore  conditions  mak- 
ing unpnjhtably  low  freight  rates.  That  insignificant  military 
enterprise  in  South  .\frica  which  lasted  for  two  years.  1899  to 

'  Marhxc  Review.  >tarcli,  1917 
;  l-iiirflay.  Jamiarv  4,  1917.  p.  36. 
'Ibid..  March  15,  1917.  p.  .144. 


Sini'fl.N.,    POLICY    AFTER    THE    (JREAT    WAR  337 

li'Ol.  was  con.luctcd  (I.OOO  miles  fn.m  the  Hritisl,  l,.ve  there- 
i.-re  rec|ninn«  a  relatively  enorm.nis  am.n.nt  of  shipping  The 
conse,uent  scarcity  an.l  higl,  rates  gave  the  ship<,wner;  twc.  vears 
o  Kolden  harvest.  Fvvery  shipyan!  .n  earth  was  l.usy  buiMing 
sh.ps  fnr  the  speculative  owners  who  wished  t,3  ,.et  new  ship! 
to  .1..  the  hnsniess  uh.le  the  freights  were  good.  What  hap- 
IHMied  was  the  j.„„t  release  of  a  great  numher  of  new  ships  ami 
a  great  mnnl.er  ot  old  ships,  so  that  in  the  earlv  months  o  ,  .01 
rates  tell  with  a  crash.  :  u\  it  was  years  before  thev  wer.  .- 
s^-re.  to  comlitions  where  the  tramp  steamer  could  nu.:;.  a 
•suitable  proht. 

Despite  the  fearful  famine  of  the  present,  the  danger  of  over- 
production following  th;.  war  is  perhaps  greater  than  was  the 
as    durmg  the  Hoer  War.      \Ne  have  a  greater  ship  famine, 
therefore  greater  rates,   therefore  a  greater  temptation   to  th 
speculator,  for  at  the  present  time  a  man  can  pav   for  a  ship  in 
u  voyage  or  two.     Hence  the  almost  irresistible  temptation  to  trv 
..get  new  ships  that  may  be  upon  the  sea  at  least  long  enough 
for   hree  or  four  ^oyages  I.fore  the  crash  comes,  at  which  time 
the  lucky  owner  may  have  his  vessel  clear  and  perhaps  even  some 
profit  to  boot      The  longer  this  war  lasts  the  greater  will 
the  capacity  of  shipyards.     We  will  need  about  four  to  five  mil! 

ZTr  T  '"'1  "*"  '""  '  "'^'"''y  ^-  — '  ti-es  that. 

He  ce  the  shorter  the  time  in  vhich  building  can  catch  up  with 

need.     It  is  almost  unthinkable  that  when  that  balance  is  at- 

tamed  it  can  be  maintained  without  a  slump  in  freight  rates  that 

dnves  them  down  to  the  rather  oft-reache<I  point  where  vessel 

must  wait  at  the  buoy  for  returning  prosperitv:  especially!    th 

siUiation  probable  because  of  the  likelihood  of  a  feverish  pedod 

of  reconstruction  and  speculation  between  the  end  of  hosiilities 

and  the  ustial  collapse  that  follows  a  war  and  its  resulting    ot 

mercial  disturbance.     A  surplus  of  only  two  per  cent  of  shippr. 

sends  rates  to  the  bottom.  H       c     oi  snippmg 


.•i:N 


i.NILlKNiK 


i|'    Tin:    t.RK.M     WAR    'I'n.V    SIIII'I'INC, 


// 'hill  Sluill  be  /><.«<•  Ti///;  Shipyards.' 

When  .hipln.iM.nK  lia^  c..„«ht  np  w.th  „ml  ,i,c  wnrl.l  faces 
ve  cer,a,„,y  ,l,at  .,„,„l,i„.  ,(,,  j.^.f  ..,  j,^  ^„.       ^,,^  _^_^_^^     ^^ 

"t  o,  cnnH,„s>„.„.   „,r  .here  will  he  „.,  ear.hlv  nec.l  „f   L 
M-  "..Ic>s  „a„n„s  >hall  .leiiherately  I.uil.l  .heM.' a„.l  lav  ,he„. 
-"^'  ■-  tlK-y  .!„  rules  i„  an  armory.     That  w..nl,,  „,erelv  ,."- 
I'  "<-•  t.,r  a  tew  uars  the  shutting  ,I„wu  nf  shipvanls.'     Which 
^.r.s, „,„„„,,„,„.     lncIer,hennler„fc,Jpeti,i„nitu„t^ 
1-  .he  yanis  u„h   the  hi.Iu-r  c..,..  per  t.n   ,h.'t   will   ,.e  sh" 
;'|->..heyanls.f^n,eri.^^ 
'""•""I.  -r  Norway.  ,„  p,rhap,  ..f  (iermany.     Then  we  shall  he 
.ace  tu  .ace  w.th  this  question:  Xow  that  the  war  is  over   fleets 
..re  restorc.I.  .n-.t  of  the  lirst  i.Hh.strial  wonn.l.  are  he-.le.i;  what 
>  Mil  we  .lo  w„h  our  ^hipyanl.:-    What  shall  W  our  policv  with 
s  W."«|     ^^"■-letit«ototheforei«.,eracroithesea' 
i^lv    hni  T"  '"f  "I'-^i-'^-  ''•''*«'^»  -'>-«^  -'-<ly.  mileage  suh- 

iea>c  them,  or  shall  .t  own  ships  a.nl  operate  them  ? 
Ue  ,„,.„|.|  „,„  1,       ,i^,,„  ,„.  ,h^  .,^.^  ^,,_._^  ,,^^    ^^^_^^^_^^     ^j 

he  Covernn.ents  o.  the  Tn-te.)  States  an.l  the  L-.,ite.l  Kingdom 

s    he  s  ron,.est  p..ssihle  policy,  namely  l.uil.lin,.  >hips  an<l  hand- 

...  .ht„.  over  to  shipowners  to  run.    This  is  easv  while  the  rates 

are  n.ounta.n  h.,h.     1,  nill  not  he  so  easy  .hen  the  rates  .o 

i^riha,  ;;:'""■  '"'"■■ ""  '''"'•"  ''"•'""•'>•  '-^  '-^  -»-"^- 

istit  tnan  tiie  present. 


CHAPTER  XII 


World  Shipping.  World  Organization.  World  Peace 


Oi  i<   L'MFrEi)  \V 


iiKi.n 


The  ,v„rM  i.  „„e.    ship,  ,,,,„  „,,,    . 

w;t,  :':■ '";  •"- « - '--  -">  '«»■  ™.i  ..!>», 

ivhn  „1     I  "        """  I""'"  "•■"  ""  'l'"'l  "f  the  men 

jcn-rney  s  r.„Bh,e„.,l  „,,  his  „„h,,  ^^^i,,  ,„,,  ,    "  »^  «^  " ' 

;^ec„n.,,„i„,,  T;e„.,eirx:''L;'vr;;r%r^^^^ 

that  could  not  furnish  the  materiak   fnr  .• 

Wepe„„e„ee  „.„.„„ J"r  c.'^UT:  :  '.hTZ:: 

a....  «....  nnnnHK   ,hi,  .oi  »"  „  re      hrZ"::    T"'^' 
.ause  of  ,h,s  woHd  .hip  h„™,e,,  „,e„  have  cU,s,e;:<,  i"p,at' 

339 


:;i() 


INFiri-MK    DP     rilK    (;Ri:\T    W  \H    II-OV    SltllMMNC 


uluTo  it  was  K'-'-'il  t.)  live.  Tlicy  have  cliistcrol  in  -wh  iuin.,)iTs 
tiiat  they  could  im  jc  iiK^r  live  iipdii  the  prnduce  of  the  Ian. I  i.i 
which  they  (hveit,  m.  that  Kn^land  an.l  Sciiand.  IloHan.l  and 
Norway.  Italy,  the  Khineland.  in  fact  all  West  iuirope  from  .\,.r- 
uay  to  (Ireece.  had  hednie  dependent  upon  the  sea  tnide.  W'ith- 
ont  it  they  conld  not  eat.  F.ven  their  cows  depended  uiM.n  antip- 
odean hay:  witness  the  esi.ort  of  haled  alfalfa  from  Chile  to 
Uritain. 

Nnienca  and  japan  have  also  entered  int..  the  world's  trade 
.-■nd  the  world  .lependence.  Xew  luigland  can  no  more  feed  her- 
.-elf  than  can  old  l-lnKland,  and  the  United  States  finds  itself 
using  each  year   m.ire  and  more  thinjjs  from  overseas. 


The  I'rizk  ok  Pe.\cf. 

The  continuance  of  this  world  trade  is  the  prize  of  peace, 
which  has  enahled  us  to  multiply  liy  hrinjiinp  t.)  us  the  raw 
materials  for  the  physical  life.  The  cost  of  war  is  the  pn.hahle 
eiulinf,'  of  this  trade,  the  starvation  of  peoples,  the  reduction  .n" 
populati..n.  the  partial  emptying  of  IWlRium  and  Britain,  ves. 
perhaps  of  .New  Kngland  al«i.  and  the  driving  of  lands  hack  to 
the  isolation  and  scanty  p.jpulati.m  »\  the  days  of  sailin?:  ships 
and  pirates.  Ample  proof  .,f  this  is  ^]v.n\n  hv  the  plight  .jf 
Norway,  Switzerl.md.  Holland.  Bel-ium.  now  that  war  threatens 
to  al.olish  their  trade.  Still  more  positive  proof  is  j,rivcn  in  "icr- 
niany's  hope  of  ending  the  war  hy  starving  Juij^'and  thr.nigh 
stoppage  of  trade.  Another  p()s>il)le  alternative  is  trade  un(ier 
>uch  dictati.ju  as  a  world -conqueror  might  give.  Such  tribute. 
Mich  servility  as  the  Kaiser  could  enf.irce  ihnnigh  the  control 
<>{  the  w..rld  trade  <jn  which  our  life  depends!  The  thought  is 
sickening ! 

World  trade  had  not  ])roduced  its  final  good  results.  It  was 
hut  beginning.  The  .starvation  of  millions  must  accompany  the 
ending  of  sea  trade,  as  war  threatens  to  end  it.  Imt  the  prize 
of  peace  is  greater  than  the  mere  continuation  of  the  w(;rld  ..f 
V.n4.    The  age  of  machinery  has  not  reached  its  maxinnmi.     It 


v-V.' 


World  siiriT'ivc    ii-r.D.. 

""nN(..    uoRI.r,   ORGANIZATION.    WOR,.»   PKACE 


111 


"^   in   its   infancy.      UV  In, I   „,.,    i       i 

of  f.:„r.,,H.  arc  nnt  its  in  ,       '"""''■""'  """'  -'l^- 

happy  if  ue  In,t  reach  o  u        „      ip  ^'l'^'-"'"^"^'-"''^-  -' 
-for...,,.,,a.Mn.n.o..,er'lL:^;':e^;r;:^::^ 

^nV«/,7?r  (//f/f„-a/,o„  0/  /?..«„,,« 

.rows  an.,  .en  :^  st^!;^^  ^^^r"^  ^  '^^^^  ^^here  vi,. 
"'-»•  world-hal.i,  i,  t,,  „^.  ,.  „  '^  ':  .  '^''^  ""'<^'-  P'-"-t  ..f  this 
infT  man.  an,!  the  f  ...f,  , '  ,,"  ""''"*'"''  ^'"'  ^'"'^  "''••""  fncn.r- 
o.-  the  wnr!,l  that  ,    ^  "'-■;"" 'nctttrin^  man.  from  parts 

rnle-of-thuL.  ZZ  J^:^"^^  ^"^  T'--  '^  has  heen  a 

energetic  an.,  the  tnan  of"  .i:  Trl^^c H^sle!  ^ ^f  ^'V^-^ 
of  science  ;nu,  tlic  sfiwIJnc     <■  "''^  itss  so.     I  lie  hmlings 

•I.C  world  „i,h  Z^ljTlr       ""  '"  "'"  '"«"  ""'  »' 
the  h.,n,l  ..I  ,„a„     T  '  „,  ,    '       'T'  ■"  '"  ••■'"'"•  »""'"M  W 

Holland  a„. ,«,.:,;:  :r-;',!;:^f'™;'™i-vo»  .,,*,,..„, 

and  f^uget  Sound  are  hnf  ,h.7  '''"^''-  '^^'-^■-  J'^Pan. 

<H..  and  more  c.n  Wt  le      inr"""":"  "'  '''''^'"  '"'^^^^  ""'-•- 
lands,  if  .,  keep  a  V."    ^L^f,"  ^^"  ''-  '"  '^ese  ,o..„ 

that  great  e.chalige  tha^  ZZ^^      \.n  '^  '^^"^  "-^'"P 
even  a  part  of  the  untouched  resourc  s  of   ,  e  ,  """'"^"">- 

manufactured  for.  Jf-*;^---^^^^^ 


•■U-2 


rsiit  I  \(  K  OF  Tin:  CMtAT  \v\K  ii'cN  siirppivr. 


lico  iiK-  ilfjiniiUnt  ii|inri  :i  o.>mm<xlit>   of  the  tropic  wnrld  that 
laii  only  conic  to  u,  throu;;!,  ship,,     ft  is  luit  a  iy|)c  ami  a  tore- 
rirnmr  of  our  commercial  <lc|K'n(lcncc  upon  this\'rcaf  undcvcl- 
"pci  zotif.      There  \\c  tiii.l  HImt  plants  in  );rcat  niimlwr,  most 
'-I  thim  still  un.icvciopcl  l.iit  vxaitniK  I'u-  han<l  of  the  scientific 
utilizer.    \e\v  fruits  ami  foods  arc  also  cotninjj  from  this  fecund 
uarni  laiul.     Within  a  sh' rt  time  cocoa  an.l  ch.K-oIafe.  from  an- 
other tn.pic  tree,  have  paN-ed  into  tvcrydas  cuuuniption  and  the 
CMCoaniu  has  sprung  almost  overnight  int..  a  positi,,u  of  en..r- 
m.  u-  importance  as  a  fat  f..o,|  suhstitute  i..r  ..ur  iii..re  lahori- 
«  n^^ly  |.ro.luee<l  l.utter.     KoJIowinK  it  ernes  the  alligator  pear, 
am.ther  tn.pic  Initter  tree  that  tnay  soon  he  ..i  eii..rm..u>  vahie  in 
the  food  supply  of  n..rthcrn  lands.      If  the  supplies  of  wheat 
Kn.w  sh..rt.  tliere  is  rice,  uhich  the  world  is  now  .!,'.ttin.c  chietly 
from  the  tn.pic  sw.imps  of   Murma.  Inif  wliich  nianv "uioth.-r 
tn.pic   swamp  can   l,c   m.ule    t..  yield.      If   we   still   need   other 
liread    Mil.stitutes    the    cassava,    and    sueet    potato,    the    tan. 
ami  other  starchy  tn.pic  n.ots.  easily  dried,  can  furnish  it  to  us 
m  unlimite<l  (juantity.     The  age  of  machmerv  m.w  l.ei,'inning 
will  ma!u'  us  al.le  tu  utilize  easily  the  now  alnio.st  unt..uched 
ln.pic<.     .\s  man  con(|uers  this  warmer  world,  he  will  need 
every  machine,   in.m  steam  dredges  to  tlyinj;  machines.      The 
place  t..  make  these  complicated  devices  ii  in  the  cool  and  in- 
vi^oratin-    North,    the    middle    of     .Vorth     \merica.     Hnrope 
Chma  and  Japan.  Kinds  which  may.  with  ihe  development  of  the 
ma.nifactures  which  science  now  makes  possible,  shelter  almost 
unhelieval.le   nnlli.jus   of   manufac  i.rrs.    farmers.   IttmI.ermen. 
mmers.  all  l,-isy,  ami  partly  fed  with  the  trade  .;f  ih<'  Tropics 
and  the  ..ther  less  dcsirahle  parts  of  the  w,.rld.  which  are  n.    i.-ed 
l.\  nature  t,.  ciuinue  as  the  producers  of  raw  materials  a).,    .iic 
I)urchasers  of  manufactures. 


W'oKi.i)  (;oN-uri;sr  OK  Would  (;ovki<\me.\t 

This    picture,!    u.,r!<l    of    alm.^st    countless    C(.mfort;tl.Ie    mil- 
h-ns.  with  plenty  of  food,  .level, .piu^r  trade,  education,  the  arts. 


worn.!)  Mnppixi;,  wom.ij  uruanization.  wori.ii  teace     MI.T 

and  till  urcat  art  nf  livinj,'.  can  ..iily  inhabit  the  tartli  if  wc  can 
liani^i   iriiiu   it  jicrnianciitly   several  lonspiciioiiH  characters  ..f 
history— Captain   Kidd.  Alexander,  l;esar.  Tamerlane.   Kaiser. 
Thiise  accursed  twin*,  the  pirate  and  the  concpieror,  one  using 
Kovernnient  as  a  sham    the  oiher  Ixdflly  tluiiMnK  ii,  are  the  arch 
enemies  of  world  |H-ace.     .Man  is  by  nature  a  marauder,  a  cm- 
i|ueror.     History,  if  we  take  the  history  <.f  the  race  and  take  it 
in  iK'rspective,  is  a  sad.  sad  chronicle  of  almnst  iinendin«  maraud- 
ing coiU|uest.    Why  did  the  prehistoric  Swiss  have  lake  dwellings, 
and  the  prehistoric  Spaniards  live  in  caves,  and  why  was  Rome 
iiuilt  nn  seven  hills?     And  what  hapf)ened  to  Hahylon.  Nineveh, 
C  arthajte,  the  Aztecs  and  Louvain?    There  is  ,,ne  answer— con- 
quest.    I'amily  has  fought   fainilv.  clan  has   fou(»ht  clan.  triU- 
has  fought  tril)e.  people  has  fought  people,  until  the  numl)er  of 
.siicli  episodes  nuist  certainly  run  to  seven  figures  if  not  indeed 
to  seventeen.    Civilizations  as  far  back  as  the  last  seve'i  thousand 
years  have  risen  and  fallen  l)efore  the  s::iashing  blow  of  some 
vigorous  band  of  rovers.     How  long  it  had  continued  in  the  pre- 
historic past  no  man  can  even  guess,  certaiidy  tens  ot  thousands 
of  years.    Organized  society  only  arises  in  spots  easy  of  jirotection 
and  survives  for  a  time  until  attack  from  the  outside  Injcomes 
stff.nger  than  defense  from  within.     Thus  rich  .America  was 
possessed  by  one  roving  band  after  another,  except  in  the  inacces- 
sible and  arid  plateaus  of  the  Southwest  where  clifT  dwellers, 
tn.vvinp  a  meager  food  supply  in  some  narrow  irrigated  valley, 
climlicd  up  a  trail  or  ladder  to  some  perilous  height  and  there 
protected   themselves  while  they  developed  the  most   advanced 
ch  ilization  in  America.    Of  the  great  civilizations,  only  China  has 
had  a  long  history  and  that  Iwcausc  nature  placed  her  in  a  situation 
with  marvelous  natural  protection  '  where  the  people  had  so  little 
need  for  defensive  war  that  they  could  develop  pacifist  principles 
to  a  high  degree  and  make  them  not  only  an  ideal  but  a  practice— 
a    fortunate   result  of  a    favorable  location.      For  a   time,  the 
people  of  America  Ii\cd  in  the  same  Chinese  dream  of  Wash- 
ington's  farewell  address,   but   suddenly  the   machinery  made 

'  See  J.  Russell  Smith :  Industrial  and  Commercial  Geography. 


",11 


ivri.iEv.K  or  Tnr  obkat  \v\r  ipnv  *mppixr. 


I.y  ..mhIo.i  H-icricc  ..ncc  nmre   .trcnKth.-nr.I  tlu-  han.l  „f  con- 
•Hfr«t. 

A»  tfu-  i-2  cenlimctfr  Ktin  an.|  flic  march  t..«ar.l  Calais  cn.W 
ritk'l.in.l'*  iiiMilar  i.olahun.  ,..  tin-  M.I.niarinc  sh..ue,|  America 
thai  s\h\  tiMi.  nui^f  tif^ht  nr  Milmtit. 

I'anC.Mn   i.  .Ica.l       Tht-   uhnl,-   „nrl.|  miHl   .k-uii.l   itMrIt   <.r 
take  the  iiurcy  nf  thf  i..nc|iifrnr.  which  hi.t-.rv  ^how«  to  Im-  a 
«cant.v    mcrc).      Sc-   h.-w    China    chanKc.      |'anti,t    fur    forty 
Cfimincs.  .lu   now  has  a  military  aca.lemv  an-l  .IrilN  h.r   ...r.s 
ffi  Wester.,  uar  tactics  Iwcai.se  the  steamships  aii.l  the  raiin.a.ls 
-t   tne  Westetn   [K-uples  have  sh,.„n  her  that  her   isolati.m   is 
en.le.1.  that  the  CM„,,,Hr..r.  are  at  her  .In.,rs.  ,..-,ch  takin^^  ...  .hce 
..    her  ferntnry.     She  kti.ms  that  tiuvv  >he  tn.„t  .lele,.,l  herself 
Mnre  sn.l.le.ilv.   |„it  yet  n.nre  CM,n|.lefeK.   has   :he   same  thing 
happetUMl  t..  the  I'nife.l  States,  „ ,  ,h,  appeara.Ke  nt  the  sub- 
marine,  a  mcclianism   m   c..n.|iust,   in   thv    han.is   of  a   |H-optc 
ami.ithn.s  to  .lominate  the  earth  after  the  manner  of  Alexander 
and  Cesar. 

The  worl.l  is  one.  It  i>  one  in  trade,  it  mnst  also  JKjcome 
one  in  government.  The  most  serious  ,,„es,ion  jn  t  at  i-rccnt 
facing  the  human  race  is  this:  whose  Rovernmenf  shall  it  l«> 
Shall  we  have  a  recurrence  of  Cesar  an.i  Alexan.Ier  with  worl.I 
enip.re.  world  dominance,  world  ol^dience,  world  tril.ufe  world 
Mihnnssion.  or  shall  we  have  a  dcrn,K:racv  of  peoples  each  free 
>..  .levelop  its  hit  of  the  earth,  to  perfect  its  own  wav  of  d.-intr 
ihinKS,  to  trade  with  its  neiKhlH,rs.  to  live  as  do  the  citizens 
.;t  any  well  ordere.l  community-ten.linj;  their  Kar.lens.  train- 
ing: their  chd.lren.  huying  an.l  sdiing,  .-ominR  ami  Koing  an.onu 
their  peers  obedient  to  no  one.  or  to  no  class,  but  obedient  to  the 
will  of  all.' 


WORU.    TmxKIN,;    A.VD    THE    DEVELOPMENT    OF    GOVERVMENT 

'  "ir  thinking  muM  jjrow  up.  We  have  .leveloped  worl.l  trade 
uorl.!  investment,  w-rld  enterprise.  Knterpri.se  must  not  run 
Inose  and   uncontMled  berause  it   i.   bigger  than  man's  mind. 


wodi.r.  smppi.Ni;,  vv.)«ii)  ohoamzuh»\,  wouu}  i-ea<  f     34.', 

vT  rather  l.iKgcr  than  n)air>  hahit  ..t  thinkinR.    W  c  hkvt  iH-cti  irv- 
inK  t..  run  twentieth  mitiiry  JnjMtios  with  scvrntvonth  cctuury 
ihii.kiiiK.     Our  inciii  il  cnucpts  our  mental  f.-ntcnt.  our  men'- 
tal  haliils  likr  the  vi-rniiiorm  appendix,  are  of  an  a^'e  l.ti^  p-.»t. 
W  c  can  nwke  a  MTientilic  macl.inc  in  live  year?,  and  put  it  t-.  work. 
I.uf  It  i.      slow  j..h  to  readjust  Hiwiety  to  it.     We  must  .Icvebp 
world  thinking  and  world  KovcrnitM-nt.  to  match   worl.l  enter- 
priH',  or  sutrer.     After    .11.  world  u-v*'rnin,-nt  i.  no  new  ntep. 
merely  one  more  jttep.  a  larger  dc\elopni«rit  of  an  old  process,  n 
pr..ccss  of  regiotial   conv.Iidafion   that   accompanies    increasinj; 
power.,  of  tran.p.rt.     Iherc  wa-»  a  time  when  there  wa.  no  gov- 
ernm»'nt  on  the  face  .,f  the  earth  bigger  than  the  family.     Then 
the  maximum  govcrnmen!  l^came  a   Muall  group  of   families. 
then  a  tril)e.  initil  tinally  nations  u.re  iM.rn  and  they  have  risen 
and  fallen  fur  millenniums  getti  ig  ever  larger  and' larger  until 
now  xve  are  faced  l.v  the  vorv   practical  demand  for  a  world 
natioii     which,  alter  all.   is  l.ut  .:ne  nu.re    ^tep  in   the  .ige-old 
pPK-c  s  of  regional  ronsojidation.      \  recent  (racier  tells  us  of 
finding   I  hamlet  of  u^cWv  houses  in  the  ilimalavas  m>  far  re- 
moved trom  neighbors,  trade  r..utes.  and  access  that  thev  were 
obsolutely  in.lepen,|ent  of  all  inank.nd— a  lif-le. world  in  them- 
selves.   .\  little  ni.re  than  one  thousand  years  ago  Kngland  was 
seven  independent  kingdf.ms;    Wales  and"  Scotland  a  numln-r  of 
mdepindent  rival   uarrir     dan.v     \ow  they  are  one.     France 
has  had  an  i.lentu    '  history     In  the  memory  of  men  still  living 
Ital>  was  a  half-     /en  indeiK?n<lent  governments  onlv  unified  in 
ISO.     (.ernanv        a  conspicuous  case  with  scores  of  in.lepend- 
ent  states,  some  say  three  hundred,  a  few  centuries  ago;  twenty- 
seven  sf.tes  as  late  as  !  >7o,  now  one  empire.     In  IT^T  -he  United 
States  was  virtually  thirteen  i.idejH-ndent  commonwp  .iili.  and  the 
physical  an.I  intellectual  task  of  making  the  ,K-ople  of  those  thir- 
teen  governments    tunction   as   one  g.nernmem    in    ITs'.t    had 
greater  natural  difficulties  than  the  task  of  making  the  United 
States  of  the  World  nut  of  the  ten  leading  IVnvers  in  l!t>0     As 
compared  with  the  ten  Powers  of  unhy  it  took  the  men  of  the 
thirteen  States  of   1TS!>   far  longer  to  communicate   with  each 


34« 


INri.lFVtl     nl     TMK   i.". 


,\  \R  I  I'lix  ^iitiM'iN'r. 


•  thcr  It  imik  fhrm  longer  to  exchaiiKr  iheir  iinNHicii.  The 
freight  raff.  i.  i* .  tlt«-  relative  i<i«i.  wa^  j;rcati'r  rui.l  the  kiM,  ..f 
ira-K-  anil  i<t..numic  iir  iv  \sa*  k**.  Ju»I  u  our  aitcrH|ifr>  .Irivcn 
In  tht  nitiuKi-  tif  chiv  <  nunle  unv  iiatiun  imt  iif  tlu-  ihirtttti  in 
that  >car.  ••>  nut«t  thit  K«'nrrati<>n  rv|K'at  the  ^tep  ami  make  one 
P.mer  '  tit  •>/  the  leatltiiK  Pnu-r-*  »i  tlw  worUI.  Jum  a«  tlw 
thirteen    State*   rvhiKini-lieil    the   |x)»«il>ility    ..f   ex|>|.ii(in«   eaeh 

•  ■iher  thfounl,  war,  tantf,  tra.le,  .iii.l  (iiuuicial  ili-'ij,'''«^meiit,  -i 
the  nation*  ..t  the  uorhl.  it  thev  w.uild  ki-ep  the  |>cace.  imi«l 
!.tnp  the  exploit  lion  of  ,,uv  rei;iuiial  jinnip  .,|  |K'opIc  t)>  another, 
at  lea-t  where  the  espluiteil  i'*  strung  cnuugh  to  «li<.tiirh  th« 
f)caee 


S<)MK  CoNt>tTtO\>  OF  Woltt.t)  GoVKRMMKNT 

lo  make  this  world  or;;anization  Mirvive  several  conditions 
are  iiece-xarx  tir^t.  a:  nui^t  have  aceesi  to  the  sea.  There  mii.t 
l«  no  more  «|ue<ttioti  ai.  ut  the  ri^ht  of  a  |)eople  to  have  free 
acres*  to  the  sea  than  then  t-.  alnmt  the  rij;ht  of  man  to  have 
free  accens  to  the  pul.lic  road  or  -treet.  It  may  co,t  the  firmer 
"..■methiiiK  to  ^jft  a  lane  out  to  the  road,  luit  he  has  it.  hy  right 
of  law  and  eminent  domain,  and  he  jKiys  for  it  ami  he  can  j;et 
it  and  pay  for  it  whether  his  neij;!il)or  will  or  no.  So  Switzer- 
land aixl  Serliia  and  roiaiid  and  any  other  iK'opIc  worthy  of 
inflependence  must  have  no  more  (juestion  <)(  their  right  of 
eomnuriMl  access  to  the  ^ea  tlian  the  [wople  of  Ohio  or  Ken- 
tucky.     The  sea  must  lie  free. 

.Second,  we  must  reduce  the  temptations  to  war.  War  arises 
out  of  two  «lesires:  one  the  lust  of  dominion,  and  the  other  the 
desire  for  special  privile^je  upon  the  face  of  the  <  irth.  There 
muM  lie  some  remaking  of  the  map  to  remove  suhject  |)eoples 
from  galling  dominion,  as  in  i'oland  and  Turkey.  Unfortu- 
nately it  would  he  very  difhiult  in  any  remaking  of  the  world 
maji  to  exclude  .ill  the  reason,  for  special  privilege,  the  most 
precious  of  which  is  the  exclusive  possession  of  a  piece  of  the 
earth  -  si,rface— the  right  of  a  people  to  have  a  country  and  rule 


woBi.o  ^mmsf.,  wcmtD  oB«iA.vuATu>-N.  world  I  EArE     :UT 

ll«rm*rK«'>.  Tlii%  imf(>nun.u«!>  i»  aFike  iht-  nfful  .. 'tp«t!v*  «if 
ihr  liM){iic  -if  ti;Uioii!«,  ariil  -M-nMrtinie*  al«i  i>tw  «»(  tlu  K'''«'a«M« 
temptaii«m»  li.  war.  ihc  pfiii««Mii»n  i,(  a  »reium  ol  rsrth  (,y  a 
fir. .pic  >..mcfitiic,  lirinRH  ilic  ttintace  ..(  Unit  hitngcr  ihu  ari%«« 
aliiK-r  -tal.l*    whrti  f«..  |.^..|,lr'   kiu.w   each  ..jhrr\  cut), 

irte-*  ha\«r  iliffrrctn  <lch»i«icH  nt  |M»piilatu.ii.  or  i.t  Iw  nv-rf  ac- 
curate, a  iliffirrciu  rati.)  of  man  |.>  rr^njrcr*.  Tlu^  i«  |,r..l.. 
alily  rhe  Krcatdt  iau«e  of  war  li  ha-  oiir'.cil  man  lintT  I.  ng  !«• 
lore  that  ancient  <lay,  <\hcn  th«-  hunj-ry  IkiihI  of  Nraditc* 
marched  in  out  of  the  (li»crt,  climl««l  over  the  wall*  of  Jericho 
;.ri<l  put  hrr  |k;.  pfe  to  the  .«..n|  i.ami  IniHi'er  hai  M\nn\  to 
wreck  unofTetMhiiK  |»eople^  imm  the  .lays  of  Joshua  risht  on 
«l<nvn  to  that  hiack  day  f.ur  year«i  agu,  u  hen  hcnvily  jK-opleil 
(.ermany  hroke  like  a  «l,ini  acro>-,  the  iNiundarieo  of  «par*elv 
I)eoplcd  I  rancc.  One  of  ||  ■•  grave  menaces  to  eventual  tnacr  ii 
any  iw<.p|.«'»  di  .ire  to  keep  a  »par*e!y  iwopled  lan.l  alonj;M<!e  a 
dcuMrly  ,,i.  piid  land  ^i^-mHv  .  nj;erous  i^  the  white  ninn's 
desire  to  keep  Ir^  '      '  ,■. hie  and  i.   ,    dude  the  yellow  niui.  and 

<hi.  h     I   Canada.  AuMrnlia  and  the 
■  'neH-  excUi«ion  act*.      1  hi,     s  lu- 

't  •  .1  in*ult  am  dare,  yet  ittu  r  the 
'  •■  't'  .r.  If  we  will  inxist  i  .•  >i'  it,  ^  ■  per- 
hajis  we  shall,  we  nnist  niitij:atc  it  so  far  as  |k*.  -Ir  I.  ;-  aboli- 
tion of  i.iritTs.  which  l.v  free  exchanRe  of  conin.  .Imcs  will  do 
much  to  share  ih.'  .ulvantaKes  of  exclusv,-  |«is.ession  of  tcrri- 
t.»ry  an.l  re<luce  tlu  uvcd  whi.'i  densely  pe.^)U-!  China  and  Jajtan 
mu>t  -eel  i  r  the  empty  .■  U  of  the  white  man  ,i  Australia. 
Calitornia,  Uritish  Coluni  i... 

International  trade  p<,licy  thus  l)ecomcs  one  of  the  great 
cares  of  those  who  would  (rrpanizc  the  world  for  peace,  and  per- 
mit man'',   food  >upply  to  increa 

Tariffs  are  the  chief  factor  m  ;-,i'le  poiicv.  Fortunately. 
ot  tlu  two  reasons  for  tariffs  recoj;n;  1  by  economists,  one  is 
pi^  ing  by  a  process  of  legislation  an.i  the  other  will  l>e  gradu- 
ally  and  automatically  removed  in  exact  projMJrtion  to  the  de- 
vclupiiK-m  of  ibc  -trengih  of  a  league  to  enforce  jwace.     These 


the  black  nvin.  a' 
I'nili.l  :>taies  wi. 
sioii  refts  on  fore- 
things  tl»at  we  ho|. 


R  >»  *Ct  ( 


348 


INFLUENCE    OF    THE    ORE.VT    WAR    LHON    SHIPPING 


two  reasons  i«;r  the  tariff  are  (a)  the  necessity  n{  ,tarting  infant 
industries  which  can  he  started  hy  l)ounties  as  well  as  .jy  tariffs, 
anrl  (,ttcn  are  so  started,  and  (h)  industrial  completeness  neces- 
sary for  war. 

(a.  Closely  akin  to  this  infant  industry  argument  is  the 
protection  of  the  infant  industry  or  any  industry  in  any  country 
from  the  commercial  practice  of  dumping;  namely,  the  selling  of 
an  unsalable  surplus  at  less  than  c.ist  in  a  distant  market  to  avoid 
a  break  in  price  in  the  customary  market.  This  is  a  normal  ele- 
ment of  trade  devnoralization,  and  it  may  also  be  <leliberately  used 
by  the  producers  of  one  countr)  to  stifle  rivals  that  promise  to 
develop  competition  in  other  countries.  It  has  often  been  so  used. 
Fortunately,  however,  the  control  of  this  undoubted  evil  can  be 
done  without  the  establishment  of  any  fjencral  tariff  system.  It 
has  in  fact  already  lK;eii  recognized  by  the  legislation  of  Canada 
and  several  otiier  countries  i-y  the  establishment  of  anti-dumping 
statutes.  Un<ler  these  laws  foreign  goods  may  not  be  sold  in  the 
country  of  import  for  smaller  prices  than  they  bring  in  the  coun- 
try of  production.  It  therefore  appears  that  the  establishment  of 
mfant  industries  need  be  no  permanent  cause  of  friction  between 
countries,  provided  it  is  really,  as  it  claims  to  be,  a  bounty  for  the 
protection  of  infant   ndustrics  during  the  jjcriod  of  infancy. 

(b)  The  second  reason  for  tariffs  is  a  much  more  potent  one, 
one  that  looms  particularly  large  in  the  present  moment;  namely, 
the  necessity  of  developing  a  variety  of  industries  in  the  attempt 
to  produce  the  astonishing  industrial  completeness  necessary  for 
war.  There  is  almost  no  limit  to  the  application  of  this  phi- 
losophy now  that  war  has  become  so  industrial.  .Along  with  this 
idea,  we  should  never  lose  sight  of  the  fact  that  all  economists 
recognize  in  the  tariff  a  factor  increasing  the  cost  of  living  in 
the  country  possessing  it.  In  other  words,  tariff,  except  as  a 
starter  of  infant  industries,  tends  to  impoverish;  conversely, 
free  trade  tends  to  enrich  by  giving  the  importing  country  the 
advantage  of  the  -specialization  that  may  Ix;  developed  in  all 
r;ther  countries.  .\s  an  e.\;imple  of  the  impoverishment  of  tariffs, 
we  may  take  Portugal,  a  country  that  insists  upon  taxing  every- 


WORLD  SHIPPING,    WORLD   ORUANIZATION,    WORLD    PEACE       34U 

th'uvi  that  comes  into  its  bounrh,  and  has  forced  the  cost  of  liv- 
ing up  to  a  fearful  level.  As  an  example  of  the  enrichment  ot 
free  trade,  we  have  the  prosperity  of  England  and  Holland, 
with  cheap  supplies  and  a  low  cost  of  living  based  on  goods  from 
the  world's  cheapest  markets.  Hungry  Portugal  on  the  other 
hand  has  to  buy  in  one  of  the  high  tariff  markets  and  sell  along 
with  England  and  Holland  in  competition  with  all  the  world. 

At  tlie  present  moment  the  pains  and  perils  of  the  Great  VVar 
have  served  to  emphasize  the  importance  of  tariffs  as  factors 
aiding  the  industrial  complcteii'.ss  necessary  for  national  defense. 
We  have,  however,  already  passed  the  point  of  the  possibility 
of  this  as  a  general  policy  for  the  nations  of  the  world.  We  have 
developed  population  and  trade  too  far;  industry  and  war  have 
become  too  complex  for  any  nation  to  hope  to  be  commercially 
independent,  even  if  its  variety  of  resources  is  as  great  as  that 
of  this  country.  Everyone  knows  that  England  and  Holland, 
France  and  Norway  are  dependent  upon  the  sea,  but  so  also  is 
the  United  States.  Our  steel  industry  with  its  whole  great  class 
of  war  supplies  can  be  ruined  by  cutting  off  imported  ores  used 
in  hardening  steel. 

We  tend  to  become  less  independent  rather  than  more  inde- 
pendent. The  development  of  science,  while  it  may  in  a  way 
develop  commercial  independence  of  na'ions.  does  so  only  as 
r.  last  resort  of  discomfort.  Its  natural  tendency  is  to  develop 
an  ever  increasing  dependence  because  of  the  increasing  variet;. 
of  product  that  enters  into  our  daily  life.  Thus  China  for  ages 
was  a  complete  world  in  herself.  She  scorned  the  outside  world 
that  could  bring  her  nothing  she  herself  did  not  have.  But  as 
the  age  of  science  comes,  she  begins  to  want  our  machines  and 
our  specializeti  productions.  That  is  typical  of  the  present  status 
of  the  economic  independence  concept. 

For  the  conduct  of  a  war  a  nation  needs  access  to  the  sea  or 
colossal  preparation  such  as  Germany  made,  followed  by  almost 
instantaneous  success,  sudi  as  Germany  did  not  get. 

Tariffs  can  not  make  us  'j\en  in  the  United  States  independent 
in  war,  although  if  deliberately  used  for  that  purpose,  they  could 


•.',:,(> 


IXFl.LEXCE   or   THE   OKlCAr    WAR    wPON    SHIPPING 


make  us  nearly  independent,  but  at  great  cost  through  high  living 
ex|)en>e>  and  inefticient  imhistry. 

h\  ery  year  science  is  making  military  completeness  less  |K<ssihle. 
attack  more  deadl>  and  isolation  more  impossible.  'Ihe  past  is 
gone;  along  with  it  isolatior  is  also  gone.  The  world  has  given 
ho^tage  to  peace.  Our  century  of  world  trade  has  already  de- 
veloped the  degree  oi  interdependence  of  nations  and  def)cnclcnce 
on  the  sea  and  ships.  \»'herel)y  we  are  compelled  to  maintain 
this  commerce  or  lapse  back  to  a  past  epoch  of  small  population 
or  obedience  to  som'  vrant.  The  Rc.olutionarv  motto,  "  Unite 
or  Die."  used  to  b. .  ,  »  American  colonies  together,  was  never 
more  applicable  tha-  ,ay  and  now  it  applies  to  the  nations  of 
the  world.  We  must  unite  in  world  organization  with  a  free 
sea  permitting  a  great  world  trade,  or  start  into  an  ep.xh  of 
mditansm  \vitb  the  menace  of  l^eing  united  by  some  world  con- 
queror taking  a  rich  world  tribute. 

We  can  not  hope  co  remo\e  from  man  the  lust  of  dominion, 
but  we  can  do  much  tt.  remove  from  it  an  admixture  of  the  de- 
sire for  land,  and  the  desire  for  trade  privilege.  We  can  not 
hope  tf.  remove  land  hunger,  but  ue  can  greativ  dull  the  appetite 
by  establishing  freedom  of  trade,  which  will  still  leave  [jcoples 
free  to  develop  their  own  social  conditions.  By  this  mitigation 
of  desire  ue  have  .<ome  chance  of  organising  the  world  m, 
that  it  may  be  able  to  suppress  the  lust  of  dominion  and  this 
modified  land  hunger. 


INDEX 


adniinUlrativf   roiumittees.    44, 
cijlitrol  over  war  risk  m^iiranct*. 


•J<i<>, 


W4, 
■Ml. 


Admiral! 
4,%,  ir. 
Titt.  ti2,  charier  and  rcijuibtt 

i:i;i.  t."s,  iiH.  17J:  iiiiKti.>M 

ciiiitriil   ()•  cr   •tht)ihi)t1(tiiif{.  -4 

:;.".>.   I'.'ii;    ulllclal-,   L'lill 
Adniir;iU>.     I'lrst     Lonl    '^^     liir 

.Siv   ,i/ji'   llfildrs.    ^ir    I  ni. 
Afiial  nn\  ifiatiin).  "JIS,   .;js.  :tjl> 
Africa:     hnr    IraHic,    N;    tiantp    traffic,    -'t ; 

dla^rant     shimiiiK     vctcl     niuvcinciu*     i 

l'mtc<l   Kmnrlnm.  71> 
Alhfd    Mantinir    Tran-'iiorl   i'ouncd.   liKf- 
Amcricaii     Intcriiatiurial    I  iTiHiralH'n,    '^HTk 

I'Ml,  ill.',  .HKl. 
American     ir.rc  rnatuinal    Slii|'hiiildiii(j    < "r- 

ptiratii.n.  'JS."..  ^Slt.  ;ilHl 
Anu'ricaii     merchant     mari'ir:     condition    at 

hfllinninK  of  war.   .'---oj.'i;    mcrca^, .   "«'. 

1;;n.    m,   hiiih   com   of  con«iructioii   and 

oiwration,   7-.    I:;'.';  eovtrnincnt  aid.   l^tj, 

ii'T,  r.>.s.  i:i(i.  i.-ii:  i;i.-..  144.  \4:>:  re 

qinrcm;-nt!i    for    living   national    Itac.    12H, 
I  SL'L'.     free     •sirip     policj.     \'.iH.     .>tate     e.x- 

■  »mpti.>n  from  laxatioii,  l.'i;;.  mail  train- 
'  pnrtation.  l;i;t  i:'.,'..  144;  ottccis  ..ml 
'  sailors.   1!I,"-1(1T     rc'iiiiMtlon,  411. 


'  mctti 

.•i.MIIlo:!. 
Amundsen.  < 
Arcllanjtel : 
Arjicntinn  :   . 

ports.  4.'!. 

107;   diasrani 


l!))(.:;(Mi, 


111, Lii, I  lining    after    the    uar. 


iptain  K.ioiil,  lt».".. 
ade  of.  stl,  l(!i;. 
uly  r'Milts  of  lessat 
r7.  deere;tsed 
Iiowmg 


n   of  ix- 

at    supply,    77, 

I    movement'' 


to  rimed  Kingdom.  7'.l;  paraly:*is  of 
trade.  >>li.  "l:  trade  uilh  Cnited  Staten, 
!ia.  1117.  IIL'.  ini.  IL'll;  llerm.m  hrms 
m,  !i7.  Itl7.  1-Jl.  VJ-2;  tuture  policy. 
,tn  :    stati-tR-.    Ml 

Australia:  lim  lialfu.  .S;  tramp  ir:iffic.  o.'|- 
grain  exiiort-.  :H.  l:),  171'.  0,1).  ,^.. 
creased  shippiun,  77;  wheat  situation.  7H; 
coal  e.xpotls.  7S:  iliaRram  slh.wiiii;  v  e-sel 
mmemtiit-  to  I'niled  Kiufid.^m.  ill;  food 
exports.  K4.  ">."i;  wool  ,  xports.  XI!;  cotton 
llliports.  ill;  Ir.-ide  w.ih  I'niied  States. 
Ii-I;  i>o:  tal  suhventions.  |.",tl;  u..\ernmtnt 
•  ■\Murs!iiii   u{   vessels.    ;ij4.   ;(:,>.% 

Austria-Huiiuaiy  priuii  trade.  III. 
trade.      IL'll.      k'oviriuneiil      ,iid 
buildiuK.    lof,.    |:;(i.    i.-ji     i;(o     |;„j 
l.'ill.   14!l:   retjistrv   lemshttion,  ISL'J 

An-tnail     l.loyd     .-^teaillsliip    I  „  .     ]:;((. 

I:iL'.  i:i(i.  ii!i. 

AtiMhary     cruisers,     lIUi.     i'A'A 


KM. 


sling 
ship 
l.-li, 

14!), 


Ilaker.    llernard    N'  .   27,1.   274 

Ilaltimore   Dry   lliH;ks  .ind  Shiphuil.lini!  Co., 

Darites.   lil.n,   211.SI.   L'O'.i.  2;i2,  2:1:; 

lielgium:    Koverument    war    risk    l.urea::     .",!); 

food    rationini!.    K.".;    news    prim    .  \i.orts. 

ItS:     Kovernraeiit    aid    to    shiiipine,    1211 

127.    Kill.    KM.    Kill.    I.-,1. 
Il,thlfhem    Steel    Corporation,    200, 
lll:ick  list,  ;i',l.   121, 


lil.ick  Sea:  f.od  cxiH>rt«.  M:  prohibition  uf 
exports  I  .,  1114;  (rtritian  trade  «itli.  14V, 

Hlockade^_Hrilish  effeel  on  marinr  rnsut 
.itice,  ,'».%;  effeel  oil  Cotton,  .'ifi.  W2.  1*7. 
effort  I.I  prevent  trade  will,  Central 
Towers.  ."»(1.  i»7;  falluie.  '.!>•  '.HI;  meas 
ures   a.loi.ted    '.y    e.xp,, tiers.    :>',>     KK), 


I! 


I!..,.k 


rat...    40.    !-.:i.    I. ",4,     l.'kT 
1.'.7,   \r,y.    ll,!l.    172   17,".,    I7t).   iSI, 

li..ar.l  ..1  trade  iHritish).  117.  i'5f. 
IT4.  2,-.7.  2,-.!l.  2<U1;  presidenl  o< 
Kunctman,    Sir   WaUer. 

liocr   Wat,    2<t     )2,'t,   Xi».   X''. 

n.'unty      (.-.-  Sid-idies. 

KouKs,  Kear  Admiral  I'rancis  T.,  2!I7 

lirajil:    trade    vdtli    Ciyjed   S.jtes.    li. 
1^.  till.    llWt.   II:!:  iliaur.ffK  sti.minji  \ 
n;ovemcnls  to   'uilcd    Kioijdom.   71< 
.•Tinu:iit  aid  t.     -hippuii;,   14<i.  l.'.l     . 
i.sp'.rts.    :il.-, 

I!rist,.l.  J'a  .  shipyards    22«.  2S5 

Itriti^h     .Vlanufacturers     Corp'.ralion, 
117, 

British  merchant  marine:  national  value. 
42;  hl.>ckade  of.  at  outhrcik  of  u»r.  7.'< 
government  aiil.  12tf.  127.  KUI.  1.1:J-1,"„% 
1«»M44.  itTecl  of  free  ship  i«.'licy.  lix'. 
I.'afli!  t,"  coMuianles,  KW):  mail  transpof»a 
MI:    renui.»fi..u    of,    K-.M.    llS^i. 


1 .-.«. 


1,. 


1'!, 

-s,  I 


..iTee 


llll, 


lion. 


Ki:!. 


I,HO:  i(,."rrnment 

<-,  i7»risi« 


Kislr 


172.  17,t.   17 

172184.  final 

lation.  ,'!22     ,-tatislic-.  24(1    25S 
tlritisli   Trade  Corp.>ranon.    1  Ifl.    II 
IJulgaria:    suhvcntioiis.    1411 

tail\vu>s.    IiH. 


.ntrol. 
ii'liis, 


imt*,,,! 


(lues 


trade  with 
.  .rnmtnt  aid 
114,   Kovern- 

1,11.    1.12: 


H;      trailc 


.jue 


Can.ada:    prewar   tr,ide-    12.    2.1 

fnit.d    .■st,i!.s,   !i,1.    lOo      Bo^ 

to   »hii.|.inK,    1.10.    1,17.    l+;f, 

ment  owiursliip.  ;!24,  Jt.ir. 
Canal:     .'.■imhurs.  nient    of   d 

in  fjermaiiv.    14  > 
Cnpi.s.  Rear  ,\ilmiral  W'.ishiriBtnn  f.<!e    281 

28,1.  HHT,.  280.  2!MI,  2!H.  211.1, 
(Temcnt  ship— .tee  Concrete  ship, 
Central     .America:      line     traitic 

(.aralysis.  .81. 
Chamlier    of   Conimrrre    if,    S,). 

eoncerninn  ship  f.,nIr.^.    llllt. 
(  !  emieal     prodoei^       cessation     of     Cerman 

exlKirts     ,.f.     .82,     .American     eximn.     8,1; 

.\meriean    .level. .pment   and    iiroleclion    of 

lu.lustry.    11.1,    114. 
(hi.e:    .hanram    sh.iwiiii;    vessel    movements 

!o  I'nile.l    Kingdom.    i!l;   nitrate  l.usin- -.s 

of.  82,  !lti;   tra.le  with   I'niteil  States,  ii:! 

subventions,   140,   l!"!!, 
China,    line   traffic.   8;    shipbuildinit   in.    :!7, 

cotton     cloth     imports.     IK);     tra.le      wuli 

Initeil  .Slates.  03;  Crfnnan  firm  i  in,  121; 

sire  .if  cotton  bale   iii.   21.'i;   war  prcpara 

turn.  144 
Clark.    I-,   H..   27.".  27fi,  27S.  27!)    20.1 
(  ly.le    l.iiie     212, 
Cly.je   Steamship  Owners   Association,    171, 

2,"i7, 


3ol 


INIH  \ 


«  <]i^  >  .i.|«:  MMiUnlJiTil  vrsM-l<  huill  In 
^'■"'i  -■  ■*  I"  l"'-ii!  t"  >-|.ni-.  Ulf..  -..lu.i,' 
l.t"'         ''•'"■    -•'•'■    .^'''trmmnl    ..(JiciaK 

'  "»'  -      ihiium'nf.    «.    7:    incr-:iv    in 

'.'."■      ■}}      ■*'■     l''Hl«ll    cnlrMl.     II,     |1 

It-.',  iiiti   ttii,  .■ir.',  :i:.':i.  i!,,,.-:.  .■,,.„«, 

...      IWl       17.1       , |,„j,     ..,     ,.„^'    ,. 

1  tillril  M  itr»  <K|  tl'..  77.  ltd,  imi 
Aiii.Ti..!!!  i-.intf.l.  11;;.  !;is.  .1(7  ■tix' 
•JfHt,  xf.itivtio*.  77. 
I  a»l_iim  'railr  r."irv.iti.iii  .i(.  I'.'.1f.'7 
14.".  H«  rr-!ruti.irn  uf,  1  i:;.  171' 
llnti-li  I  ._..itrol.  171.  ^r^l^Mt^..I.<  . 
inuvi .  ,   l!Kt.  Amt-ricai'  t't  ntri>l,   II»N    ;.*tt»» 

<  ''ly     r-imlin.W.   2s:!.  l'!M 

<  ii  r.    I.iii.  .    I.Tfi.    Ml. 

I  •ii-.mcrc.;_  Ih  f.tn-  Ihr  v..ir-  Ir.iiii!.  ship 
Iniftir,  ..  I  ;  liiu'  Iratlic,  < .  i.rm,|,ti,,n  i.f 
i'im|iiiiti(.n.  Slid;  n-u!'-  ..|  .i«ri  iMni-nl«. 
HI.     ntvt-ssiiy     t„r    rum  rnm.  ,.1     ii,itrfi-r 

VIHT.       Ii;      nccan      frciyKt      r.itvs        1  ,S  L':t  ■ 

fniKht   .|t(.ri..«i.in   ..f    piN.    I'li:    1111,-ina 
liunal  iMiii|.,tiliiin.  lil.  LT). 

<-H!Citilli,ii.  i.riviar  |.rt',.  ■■,li..ti  ,,f  r.ilc 
ajsr.fmcnl.,  11.  .liM^on  .,1  it-rrilnrv.  Ill; 
div.,iiin  ui  tr.iffic.  II;  p,.„!iiiB  of  freight 
ni.miy,  11;  iiiil.Rlr  taintr^.  1'.';  in 
It.Mt'.at  aprrrtiK  Piis,    1.',. 

(  'impositc   slijpn.    ^».'{((. 

tolliTftc  >lnp-:  i-.mr.ari-.>ii  with  ^t.in.lanl- 
izc-.l  .tfil  «lin«,  •Jill,  li.'ll  ;  Ir^tory  ,.f 
ciiiUTiti-  in  .Inphuil.liiii;.  L'.'ll  •.'.'ill  nu-th- 
."  «  "f  Iniii.lini;.  :;:!ll,  l':i7;  laurulnnK. 
-li;  a.lv.nilatits.  :.':17 '.Mil;  ,li.a.|\aii 
taur*.  L'.ill:;!!.  I.l„y.r<  appr.A.,1  -'Jl- 
prcsi'iit    i   Mit>-,1   .Stati»   pr.iKram.    L'41  1M;|' 

<  iintjahanci     unct'ttainty  rtKaniinif.  ."id.  ;»7; 
rcliKil  'I    riiit.il  Stnt.-s  t"  in-iirr  m'ss.-!» 
carrying.   *H),  117;  ships  searched  for.  !17- 
^  chanci-s  111   iisis,  •»7, 

("'■nvoy  >\st(iti.   171.  '2\v2    :.'i(;{    "o| 

forrunaliil  •,liip«.  JlN    L'l'i 

r..tt,m;  fr.ik-lit  rat.--;.  J-.  ::|;  i.nuiiiinn  in 
.'•outliirn  St. lies.  43.  4!».  .">(!.  «L'.  07; 
effect  ..f  li:,H:k;ii|,  on.  ."ill.  ^;;.  '!I7  Insni'- 
.l.ice,  (i.;  lUeline  ami  recovery  "f,  HJ; 
llntiih  export  of  inanulacture*  of.  !l(l 
iiiatuif.acture.i  in  .la|,aii,  (Ml.  ni ;  .Xmericaii 
confeieiice  eonceminB.  ID.S;  re.luction  in 
sue  of  hales.  I'l.".. 

(ramps  slnpyarl,   I'OS, 

Itiliir.l  Line.  .sr,.   i;ili,   i:!:i,   ]:!|.   1411.    141 

Dar.lanelles.  .'U.  7.'i 

Defin.e  of  the   Realm    Act.    1(12.    174      > W 

I)e   L.inoy.   William  ('.,  .".!) 

Denmnn.  Win..  '^:;u  ^,'7;;  0-1  .,--  .,-- 
L"7!l.   li.so.   r.l.'..  '    "      ■-'■■-"■ 

Oenniark;  line  traffic.  »>.  l.-f);  ililfinilty  in 
seciirint;  r;nv  iiMlerials.  ■,\H .  eoal  auree 
meiu-.  41;  government  tt„r  ri-k  liiireaii 
■'  ■  '"cre.iM.I  coal  snpily,  77;  fo.Kl  im- 
ports. S.l.  St;  traiie  with  Cermany.  i»H 
:..'i  ';"eerii.i„nl  lui  t,,  shlppiiii-.  1^(1. 
.',-,.'.•    '••"•    '■■-'■    lo".   I"'";  c„iHr>f  l„,ats, 

l>ia.!ranis:  movement  of  tr.iiii  from  River 
larau.i.  L'l  ;  v,,s,|  mownienls  i.i  ;iii,i 
from  I  nite.l  Kinuciom.  7  1;  eiTiet  ..f  «ar 
0"  inerchaiil  shiplmiMinu.  I'll-'';  sinphniij. 
iiii!  eapncity  of  I -nile  !  States.  I'.tH- 
Itll.s.  oij., 

Iliesel  erKine.   L'7.-,. 
UnaM.   .loliii   .\..   07;!,  1;mi. 


'•fy "<'•«■'      "'I  '"I'l'lv.  7N.  c..a,tinK  ira.lr, 

K«J.,.      l,„r     rraflie.      -S.      ,„,r|      r..nKe-l„  „, 

.     .W.     .lerreau-.l     .,..,;     -,,pply,     77;     ^01,0, 

ih.Jli     >m|«,rts.    •>...     „,,    „f    ^„„„n    ^^|,.^ 

rWtrt'    niistrr  lint.    l.ll.  HI 

l^'rfr"  ,.^-'""     ''"•"■■"'•■>":     ree-ruiliiiB 
Mrvice.     111..      cfeal..„    of.     hy     Shipping 

oBlcers,     L',(|.     2«i;i.     L'im,     I'd.-)  "Oh'     ,,.„' 
!V-    ".(„J"".^".">  ■■   -'"'■    contract.;    I'WI, 

..     Itilla.l,   phia.     JKi;     house,     buill     by, 

•  Ki:;.    -lali-i,.-,    .if'     note.   :i. 
hnlreixil  ?rn.«.     r,-,|ii,-iion  nf.  hO-kk    |o| 
Ki»ti5.   V.  .\  .  jT.-..  TiH,  i'7'i    -ii:] 
Kxp.irls;    |,re„ai     eon.h.io,,.,    .-,,      Xmrrica.i 

.7TT\1''\  l."''-  "-.:.'•••':  I'r-hihi,,..,; 
"I.  to  I  elitral  Powers.  7.-..  !t7;  .leeline  ..f 
KiiruiKan.  s:.'.  !Ml;  l!„t„h  government 
conlro.  11,:;  ,,„  „;,.  ,„- «  v,,™™ 
cnmrol.  1.-,,  1,,:..  ,,.r,  .IToVts  t„  ex 
pedit,  21...  l'l.V_a.l,i,„„„rat,ve  ..Keiu,..". 
K'o.  staitsties.  77,  Hii,  !>2,  •.;(, 

I'.ihricateil    shii.s,    i'^."  ••"7     "".T  •»-.!» 

27.1.  L'-.2  pn_  :„,.-,    „„■,  r,;'-"'.    -..'. 

leileral    ^lilphiiil.'iiii;    i  ,.      .-Kn 

h,''M,n ''"a-  "'.,."V"",'^"""-    -^^-    '"    'I'M- 
.0    iinK.    4...    2..(».    2.'.2.    2.-.:t;    a.lini,s„l„ 

;ha,'7:f'';„;;;"'oKv,  -'*■  -™.-ris.,n  w,th 

[ermison.   Iloi,,,.,    oi,,,    o,^,    .„,-    .„|,, 
;erro(„,u,,.|,.  .s.hi|,hoiWi,«' ("„     I'JL'' 
erris   shi,,   ilesign.    2L'7.   27!».    2HH,   note    1 
HsiiiR  hoats      ,,.,.   .....rial  nav,„.i„„,^. 

I  00(1;     ftlfct     uf     i.r.„  n.'ii,  M       ,.,1 

lion    01     ,„i    .,   ..    '7,    ":-'■"'   i-""-'"''!' 

control  ■„,.  7.1.  1..1'.  ...V  ;.,CTf''"r'" 

on.    s.i.,s.,,   ,|,.man,l    for.  >x>,    2l.7;     \rm-ri 
can  ixports  of.  !.4 ;    llritish   hl,H.-kaile.   •17 
(.erman    sii,,,,!,,,.    ,,!i;    liritish   control    ,,f 
iijiports.      I„2.      .Vorwesia-     res.iielion.. 

[•"•d  Administration   (C.  S.).   Kl.".    •'!.•! 
loo.l    Coniroller:     liritish.    IIIL',     1(17"     \or. 
wi-Klan.    111!.  ■  •     ■      ' 

lord.    Ilenry.   21 S,   .W.';.  ,•)(.,) 
lore   Kt\ii    .■shiphiiiliiinu  I  1...  2!l.'»     •".7 
loremn    ■. .  ,sels     ,„i,„,s„„n   to   iiai.oi',  ,|'  rec- 
istry.    I2S.   12!>.   144.   14f!.   IS7    ^-Jr    sot 
ventions    to     l:i.|.     Hi);    leuislatioii  \,,„ 
cernmc..    Is,.    .hH;    .i,lmissi.,n    to    .\„irr|. 

S:;  2;;^'  ^'"'"'  "'"""^ ^-  ^ 

iTanee:  prewar  aKreeine.its  anions  linrrs 
I.;  port  coiit'e-lion.  :i."i.  .'lli  ]iii  ](p.' 
1X4.  ncBlect  of  shiphnililiiii...  :i.s '  ..„C' 
ernmrnt  war  risli  Imreau.  ."II.  .|ye.lii;f 
Imports,  s;;;  food  imports  .s.'!  li.«r-  fool 
control,  s.-,  Ill,,  ,|r„„  ,.xp,,r,;.  s!l;'tripl. 
with  I  nited  states,  !.:i,  (l.-,.  n..,.  ,.„treiiot 
ra.le  to  1,,,;  ,,.,.„|„  restricti/.ns'.'"',!,', 
Mil;  tr.ide  afl.-r  the  war.  117;  news  ,,r„it 
Miorts.  IIS;  uovernment  aid  to  sliippmi. 
121..  12,.  I2!l  1:1.1.  i:il!-i;i!l,  US  It!.: 
increas,.  ,„  im,.orts.  l.-,!l;  „,e  ,,f  p.niish' 
;,".'"•  ,'  V'  '''-:  '  "iclianue  of  vessels  with 
;,.""cd  .st;ites.  2111;  cnerete  rowh.i.it  ,.f 
.■;:.'..•    -""•     •^'"crican    vessels    built     for, 

I  rec   sh,.,    poliiy.    12s. 


INDEX 


.153 


rrcnlnin  "f  ♦he  sc;i ,  prru-.r,  T).  •'».  rfTrtt 
i'f   *jr.    -Ml 

l''mK)tt  r;tti  <.  lijitti  .TurertiHiits  1';  niim 
tnitni  '  .it<  ,-iKrvt'ii)i:ri(»,  l>i.  |»tjt.t|int(  •>! 
incnfTM .  !  1 ;  tUftrrt'H  rt'(»ate>.  11!.  LM ; 
culluiti  '•:.  I.'*,  mfuriii.il  a«i<  inuiii-*.  l.'i, 
tramp  .hkI  liner  coini-  tri-t.u,  |M  l*:(.  tow 
ratv!!    of    t1i|4.    *j:t;    inltti.t.ct-    nl    u,ir    on. 

30.  ;ii.  :►:[.  r.n.  i.-vi.  i»ih.  itnii^ii  control 

of.    :;t».    ITtM.    ITi),     17fi.    IHO;     AiiiiiiLan 
control  of,    I'M,  \U'j,   itMl.  JiK* 
Futl    Ailnimislralion     1 1  .     s. ».     1 1:.',    l*h:», 
note. 

(rt-itilts.   Sir   Kric.   41.   4Tt.   ■Jdl.   L*»;'j,  i»((3. 

("■cnnan    K;l^t   Africa    I.no.    J.'l.l.    I4*i.    147. 

(itrman    I.i\:uit    l.inr,    l-^'*,    1 10.    147, 

tlcrmany:  prewar  situation,  l.'t.  1'4 .  gram 
cxiHJrt*-.  :iO.  strt'l  rxpoit-.  .*!H.  J ^7.  Amrr- 
ican  cimtrol  of  sliipnicnts  H'.  i'. .  war 
risk  h'lreaii.  Mt;  chcniital  iirtKimri-.,  H2. 
W»;  f(.o*l  ini|M>rtH,  h.'!  ,  ilntappcarnner  an'i 
rcplaci-nu'iit  .if  s\u\,-.,  m,"i.  hU.  KM,  15*8, 
\v;ar  trailt.  IHl.  li".  T4S;  rottoii  imports. 
It";  ncu-t  print  rxr)orts.  IlK;  i-oastniK 
traili-.  iL'd,  MU;  yoMrnmcnt  ni.l  to  ship 
hnil  hnu.  I-J<;.i:iO.  l.'i.'M.'jr,.  14r.  14M. 
31."(.  tradf  with  levant  anti  Far  Ka^t, 
lin».  i::.-,,  U(t.  147.  toiicrrtt-  floats.  l*:tl. 
II.'l'-*.  I'lU.  L*l!t»;  preparation  t'-r  tlie  futurt-. 

:tiL».  :Mo;{17. 

Cocihals.  <;io  W..  '_»L*7,  j:tit.  1*74  'JlH 
-*7It.  L'M,".  ;:h7.  L'fM»,  jic!,  ;i(Mr 

(ioltl:  etftrt  of  war  on  vup^iv  oi.  50;  ship- 
mrnt  of  chrekc<l,   71'. 

(Itivtrnmi-nt  aul  to  «hippinR;  restrvation  of 
coasting  trade.  lUS-lU';  exemption  from 
import  'linu-s  «)n  shiphuildmu  materials, 
127;  lulmission  of  fori  imh  huilt  vessels 
to  national  rtKistrv.  i'2^.  I'JIt.  144.  14t(, 
1H7;  prctirtfitial  railway  ratts.  llTO.  KIO; 
loans  to  sliipowntrs,  i:i(».  l.'tl,  14M;  re- 
imbur^'ement  ot  canal  .lut  «*.  l.'ll.  \'A'J\ 
exeinr'tion  from  t:i\ation.  Mi'J;  poMa!  luh- 
ventions.  i:('J-i:t7;  snlisidics.  KIT  lol>: 
Mihvcntions  P-  forciyn  steamship  lines. 
137;  vvinnnar.  140  1." 'J;  influence  of 
war,    i."L'. 

Govc-rnmrnt  •*hM>v.irii-:   American.  lOn.  '2'2i\, 

•-•Mr.,    jsii.    I'n::.    jm",    :!(m»,    :to.%.    :\'S2 

HntiMi.    1M4.    i:4n.    L'.-.4.    iTi.".    l^r.H     L'HI. 

Gnvrrnment  war  ri>ks  txire.-tiis:  formation 
of.  in  variou-i  tomitries.  .Mt;  I  'nittvj 
States.  ."Jm;:;.  Cnat  Mrttai;i.  lij  «.".. 
Japan.  «ir..  tUi;  N'nrway.  (Wl;  rates.  «17; 
cfTccl  on  I'riv.iii-  loniiiani*  ^.  *;7:  com- 
ments. fiH.7H,  72. 

Grain;  tlmKram  -.liovvinc  movement  of.  27: 
Norway's  need.  10.  lOS.  Kill;  ctTcct  of 
eIt)sinK  of  D.ird.Tiietle';.  :U ;  Atistralin'> 
tratlf,  t:!.  LMH  .  inir>orts  ami  exports,  K4, 
tl.*!.  102:  Auurtcan  crops.  K4;  Hritish 
control   of,    IP*.' 

Grrecr:  line  trattic.  S.  K."i;  erain  snpplies 
tor,  :t4:  f..r'n.,tion  of  Kuvernment  war 
ri*k  Imrtnn  in.  .Vt;  insurance  rnte'^  from 
United  KiiiiidoM  direct  t.i.  *!r.;  <lecrcase«! 
coal  ^iipplv.   77;   fooil   mipoits,  S.l. 

Guatamala:  exoort  ot  cattU-  iirohihitcd  by, 
10:t;   Ko^ernnunt  air!  to  shippinK.    151. 

Gulf  port*     trade  of.  201, 

HainljurR- Anurican    Line      lO.    H.    14,    04. 
Ilariaii  &  liollin^-wurth.  2lt.'..  2!>S. 


flarr-s.    krar    A.lminI    rred«'ri».k    R  .    2MU. 

2'.N>.  LMH.   21Mi,   2!IS. 
1 1"«      UlatKl      •.htt.^arrl :      built      bv      I  'nif'il 

Stalen   Kovcnum-it,    22*);    contr;uts    with. 

2>*.-,.  2H«l,  2(M»;  drlay»  at.  21»:i.  2i>N.  'MHt, 

boiMinn    toiidiiKMis.    ;i02;    maximum    oul 

put,  :ior.. 

Holland;  line  Ir.irtic,  20;  difTunltv  in  ».■■ 
curing  raw  material,  :»»;  Rovernment  con- 
trol iif  sbippniK.  41,  enemy  ir  ide.  4o. 
4.(.  '.)8,  00;  insuranc  rate*.  ilU;  coal 
supply.  77;  food  import>i.  H4-  cotton  im- 
ports. N7.  01;  F,i.f  Indian  pr(Mliice,  h7: 
trade  with  I  nitf.j  State-*.  0,t;  nhips  com 
manderre.1  by  Tnited  State-*.  H»2.  I07, 
1!»4;  H^wernrntnt  aid  !-■  ^iur>pm|i  120. 
127,    1:10.    i:iO.    tni.    temtfst    ^iiv^.    2.11. 

2:ci.  2:tr.. 

Holt    Line.    222. 

llnuRh    tvt»e  of    wi>fMlrM    vlun,    27*1. 
MoiiM,  Col     K    M..  21:1.  2!»4. 
Houston.   R.    !»..    nn.    1«4. 
Hurley.    Kdward    N.,   210.    212.   ik^t.     2*t«» 
2n;(.  2WH.    At'. 

Imports:  shoriaKC  m  1  ircar  Rntam.  101 ; 
Kf»\eiMment  cimlrol,  tH2.  !»»,').  |»Mt,  112, 
15N,  1(17;  exemptiun  from  duties  on  ship- 
building matcnaU.  127.  14U.  147:  li 
cense",  HO.  Itm,  !.";«.  ltJ7:  reducing  bulk 
of,  2in 

Intlia:    line    traffic.    H;    ar.iin    cxi^orti,    "4 ; 
insuratice  r;ites.  r>2;  food  exports,  N4,  H."!;  . 
cotton  bales.   21.*i, 

ln<lian  Gonference,    1*10 

[fiiiurance,  ni.irtne:  comlitton  at  bcginninR 
of  war.  2M.  40.  .%2.  7*1;  cippcndence  of 
trade  on,  4!*;  development  in  KnRlan'I, 
IV);  development  in  T'nited  State<(.  ."il ; 
relation  of  war  risk  to.  ."d,  ."i2;  pro- 
hibitive rates  at  brRinninK  of  war.  52; 
cause*  for  hicb  rate-,  ."..'(-."it;:  tIuctu;ilion 
of  rate>,  5*1,  ."t7;  inade»(uacy  of  capital 
of  private  ct>miianies.  TtK;  government  war 
risk  bureaus.  .10-70;  relation  to  world 
tra<le.  70;  growth  since  1014  in  1  *nit»-d 
States.  71:   lessons  tauRht  by  war.   71-7.'t. 

Insurance  rates;  increase  in.  oO,  .'i2,  "»4, 
rpH;  effect  of  war  on,  .">2  ofj,  .'iM;  Ruvern- 
ment    control,   #10,   00.   (17, 

Insurance,  war  risk;  formation  of  Rovern- 
ment  bureaus.  HO;  I'nitr*!  State*  bureau. 
rtO-61  ;  British  bureau,  *J2-(l."i;  iaitanese 
jilan.  05.  rtO;  NorwcRian  plan.  07;  rates, 
fM;  effect  on  nrivatc  coinpaiii*.";,  <>7-ttO; 
continuation  r'lter  war.  tlO. 

Tnteraltied   GlKir'trins  Goimiittee.    1H3. 

Interallied  (onfi  rcnce.   IXi. 

Interior.  Secretarv  of  the.    114.  214. 

International  Mercanide  Marine,  42,  note, 
177.  212.  :i21 

International  relations  after  war.  .120;  eco- 
nomic    and     technical     problems    arisinR, 

:i27.  a2M 

Interstate  Commerce  Commission,   IHO.   101. 

Iron  and  »;teci  Japanese- American  agree- 
mcnt  cnnccrmnii,  .'17.  42,  107  .'101;  dif 
fictilty  of  obtainini;.  .'IS,  2rt4;  control  of 
industrv.  44.  10.'{.  2r»r?,  254.  .".»»<►;  raw 
materials   imported.    W'A.    214 

Isherwood.  J.  \V..  ship  desijrn  of.  22S.  258, 
note  4. 

Italv :  line  tratfic.  S.  80;  jiort  foncestton, 
;{.%.  ItO,  S7;  tiovcrnment  war  nsk  bureau. 
50;  decreased  co:il  su|»ply.  77;  diatrram 
showing     vessel     movements     to      U'niteil 


jinst 


.1  ►  I 


t\T)KX 


kiiifil'Mti.  i!>:  omit  import'.  K7:  trn.ir 
xilli  li.ii,-,!  «;mi.-.  m.  ir.iilr  uilli  li,  , 
111,1111.  !tS;  n,u^  i-rinf  i  x(.(,rf-.  US  ki-v 
"iniKiiil  .li.l  t.i  "hiiipini:.  hi)  I :.'«  li'7 
i:H!  i:W.  I.-'.!I,  nil.  .MHiIiirv  ,riii„r«' 
Il!i,  iiM-  iif  llnli-ii  iliiin.  |sj,  J.  luritc 
■!iMi«,  I'.'ii.  ;.':r.'. 

I.il'.nn:  hill  tr.itVic.  H.  I.'IN.  i:i!).  ).-();  .lurrr- 
iiunl  i.iiHTriiiriK  •ti-i  I  witli  t 'nitnl  Stairs, 
*ti.  41'.  I07.  :t(M  ;  Kiivtrimitnt  «.ir  n«.k 
i.liti.  ri!!,  (I.-,.  <;(\.  ralti  1.11  ..uK...-.  in 
.Intiaiirnc  Imll-.  till,  ^aini  m  trjili.  im  !>i', 
II*»;  coti'in  lii.itmi.tctiirr-,  !H»  !(•  i.,vh 
HI.  »t..li»lics.  111'.  11.-,',  „,th  riiilivi 
.-I.Tti".  !i:l;  ti.MTumin!  ii.l  i..  sliir.iMnB, 
!').  I.'"l.  I.M;.  1;ih.  i;i!i.  ir,l>,  w.ir  i.mhl., 
ti!':  I'lirilNisc  i'(  .Xmrrit-.Tii  sIii|>b,  ISH; 
I'.icirn-  li.iil,-.  :.'(H).  icimrianson  i.f  -hin 
I'lTralmi;  iu»l  uilli  .Xmcric.lii  anil  llr.liili 
••lllli*.  ,'.:;(1. 
.tjva:  "uu.ii  111.  4;i;  iliaKram  «li,.«iini  vmt-l 
n     .iimvls  111  fnitiil   KiiiKilniii.   Til. 

Kilclirii.  1.    I...nl.    2tn. 
Ki.snii's  l.im,   ini.   HO. 

I  .1   I'l'IItllc  .Srnnn-n'i  .Net.   IS.M    ::L*lt    .'l.'Wt 
l.ili^.r:    sliiirt.iBi  .    :!(!,     nil.    17!',    L'.-,1.    •JTIi, 
-i1:    Mliiatiiiii    111     \rt;.  iiun.i.    Ml;    Ilnli-li 
Uunlilf.,    17!i.    -J^s,    L'(;4,     Uiili.li    itTi.rU 

in  iiiitiT  c.iM.liti.iii..  4^.  ml.  :;)7.  j.mi. 

-'•'L'.     l.'."!l.     L'lM.     ...ihliiiMii.     Ill      rnit,.,j 
Si,iii«.  iL'il.  ■-'71.  U'!i.-i.  .■Icil.  .-iMi::  housing 
.•.':vliti..r       L'.-.O,    :ill|.    .■;iii',    ,,)„cr,M,.n    ..f 
iLirl'iyc^.      ,01.       S.\-    .i/,,,,     liiiiaic    l.ili..r 
■  I'l  /  Tr.itip   unions. 
I..ilsc  vi=s<  Is.  Jsi,  •_'iui.  oiii.  oos    o;i:(    04:; 
l.amiM.rt  ,*«  11. .It   l.im-.   10,   n.      ' 
I.icislation   aiTiitiiii;    -liiPi.inK      llritisli.    !."». 
111!'.   KIT.   it:;,   it  I.  L'lli;    uiurisan.  I.'-T. 
!*■<.    l^li-Illl.    I'lll,  ;UM.;il'l, 
l.i'.vl.iii.l    Lino.    1  11;. 

l,!i,i.-,s   l.,r  tr.i.liiif    nml-i  ,    1:;,    l.-,M.    l.Vl. 
I'll!.      HIT;      .\in»Ttran.      ir..      lo.%.      I'll'.'; 
I'rtni-li.       I'll;      ailministralive      auincii-. 
I.'.!'.    1(17.    171.    171' 
l.im-   tratlit-:    ili  \rlotinn-nt.   H:    i.revciition   of 
i.'ni|u.-tiii..n,    ','.11;     inf.inual    a«rftiiii-nts. 
I.iii;     inHiirnn-    of    Irami.    slt-anifis    on 
i.iti-s,   0(1 -j-j;   yovcrnnif- it   control   oi,    ^\l. 
I'l:    rironiini!   .if,   UTi.   Mi. 
I.mn.ooi  sliiponniTs  .\«..ii.iti,,n.  I'll,  ."i::. 
I.l.iv.i  fl.-org,-.    l)a>i.|.    l.',7.   o.-,j.    o,;^ 
l-loyil's      oriEMi    anil    'li'i  liopmnit.    ."o.    .'I; 
U-nil  ..rary   i|,.sii,|.,    r,:; .    .\nuTUMii    l.ram  h. 
I  1 
I.!. .Ill's     l;,t'i«<r     of     Sliiwini:.     1  Hi.     I  IT, 

■-'111.  n.i,.  "41.  o,-,i.  IT,.-,  jr.:;. 
I. ..ails  I.,  v:.,|..,w,„,rs.    i:;ii.    |.-.i.    1  c; 

Nfi  \iloo.   W'm.    flitilis.    1H!I.   n,.!,       j  ilO. 

McCassit'v.    l.vntlcn.    L'.'il 

M.iclay.  Sir  J,.s,oh.    II,  MT    |i;s     171     1 7..' 

17.-!.    171.   17r.     1.S",   1;,-..;,   ■j.-,7 
.M.iil     trans|.,.rt,nti.in  •      umi  1  loii.nt     .,i.l     t... 

l.'ll>i:!7.    i:i!l.    H(l.    144.    1411.    14S     14!'. 

I  ".O 
Marini-    ms-iranrr      s.-,-     In-inanci.    m.irinr, 
Maxini.    Ilir.ini,    2of>, 
Miditi  rran.-.in      insnraiicr   ran-    10.    .">.   (17: 

trailf,    .sri;    m-archini;    of    slii;.-,    1*7;    ;.r.i' 

liiliiti.in   tif   cMKirts   to.    1(14 
-Nfcdilt-rr.inran    Coi.ti  ri  nrt'.    Idli, 
^frrrhant    marin*^       Vustrali.i.    s     ];u;.     \,,.,. 

Iria  Hiinuary.     Il'fi      i;iil      l:;]       ]■;..'     j  •((! 

Ki'7.    i:m,    140;    ritlnimli.    ILMI.    1J7'    1:111; 


ni.  1:..'.  ir.l:  Tana. la.  L'.l.  1.1(1  1  i:t 
Ul.  I'rnniark.  .s.  IJll.  Ij;  |:!li  |:l' 
U"l.  l.-.(i.  Irani,.  IJ.  IHI  11'7.  |-.hi' 
l.'l.l.  I.lll  l:i!l,  I  IS  l|!l.  Crnam.  l:i 
L'l.  1 1'd  1.10,  1:1.11::.-.,  14.-.  MX.  Il.,llaii,l. 
:"■'.  l-.'ll.  127.  l:i(i  i:i(l.  l.-.l,  li,,iv  s 
«1.  IL'il.  IL'7.  1.1(1  1.111,  II!,.  lapaii  *.  m; 
iL'd.  l:i(l.  MS.  i:i!i.  ir.o.  I.aim  Amine,,. 
14(1.  1..1;  \,„  /lalnn.l.  l:i(l,  110.  114 
IVrloual.  1:111,  l.-.l.  Km, ,1,1,  sii.  |jii.  |:ii 
.Sfatiilinavia.     Ml       ll'll      1^7       i:{ii      I'd;' 

ir.ii.  ,s,.aiii.  .M.  ll'll.  107,  i:i'„   i;i,i   111,,; 

l.'l        S,.-   , l.'l.l    llritish    nini'lianl    inariiiv; 

.Aiiirruaii    nifrcli.int    in.iriiM- 
.MiTihant    Shi|.hnil,liiik.   (  orpnration.    I'M 

iVl"  I -''■'*''''"""'"'    '"''    '"    "'"'I'l''"".    '■«"• 
Mmus:    i,isur,incc  aij.nin.t  ilamaj,.  Iiv    .".I 
M.o.,-,.   <n   I,..  Clnorra.    17.-,.    17'1.   -.'ol    ' 
M.Mi/i,-,    M.    ,1...    s.-,.    note    I,    181,    1S1>. 
Morgan.    I     l'i,r|...iii,   I'l.   ;lo| 
Mo«,|mt..    craft.    I'ls,    o)t. 
.Motor  lio.ts  ,..  Ciyiit   «wliinarinis.   L'ls 
,\Io,i,ii..„s.     .\l,„i,irv    of;     control    ..I    iron 

■  ii.tislros.    44,    KM;    ..ffici.,!,.    o,-,:', 
.Munith.n-,    risr    of    ira.l..    in.    74.     Ii-aisla- 
"on.    III'.';  in.lii.trial  conilituiii..  JK    •'4m. 

"omen    uorkcrs,   I'm.   i;,-.;|. 

Vaiinn.  I'niltiof.  4(1.   |i,n. 

Niti.nal    l-.itciKn  Tra.lr  fonnril.  V.-jr,.   .■ii!l. 


.\ay\  |i,-p.irlm,-nt-  vt«.d  snin.ly  for  iihi 
.0..  r,-„r<scMtati...i  ,111  vari.iiis  a.l'mini,' 
Irattif    .iKrncu-s.    I'llll 

Xitlii-rlamls     ,,e    Kollanil. 

.NinfaU;  Ir.ailf  ,.f,  11'  ll||  l.-,s  l|,,,. 
w-ssrK      of.      r..ninian.lci-r,-,|  '    in      'Cnilo'l 

.\>-w:^rk.     \.     I. ,    slli|,yar,l«,    'JL'tl,    os.",.    I'ltT. 

.1(1.1.    note   .1.  ■  ■ 

\cuc«.ll>.     ,li«trict,     sliipliuiMinR     in.     1'4,-,, 

X.wi.ort    N,.,v«   SliipliiiilclinR   (•.,..   I'SI, 
.\i«    \..rk  SliifilinililinK  ('..  ,  I'll.-.    •',„[    .„,,, 

;i(i:t.  :i(Mt  '        •  -    • 

N'W  /c.il.in.l-  wool  riportl.  411.  7S;  cotton 
■  iiipoils.  ,,1;  trail,,  with  l-,.l|,.,l  .States 
.'•1;   s.ii,i,.„,i,,ns,   i;i(i.    1411    114 

.North  (orni/in   l.lovil   I. in.',   10,   r.',    11     i;'l 
,  1:1:1.    1:1,-,,    l:i!l.   14tl,  ■      -    '    .    (••■. 

\>irlh  of  Kiiitlaiiil  Sli-aniship  ()«ni-rs  Ss. 
socialioii.    177.    1SI1.    0-- 

.Vor«a'  line  iritT^c.  S;  sliippiii,,  n.r.ls,  .10. 
.14;  .  irlv  clliirl.  t,.  hny  sliiiis,  :17;  ,|if. 
hciiltv  in  s,.,nrine  r;,w  material  :!«■ 
prnhiliiiioii  ,.f  iraile  «illi,  4,1.  uoveni- 
mint  war  risk  Imrean.  .Ml.  (MI;  incrcascit 
sliippiiik'.  77.  I'll.-..  :ti.'-,.  coal  s,i|,piv,  77; 
iliaKram  sliouinu  m-ssiI  moyiinents  t„ 
I  nitcil  Kiiiiiilom.  7!l;  foo.l  inipoils.  Ml; 
traile  with  rnitc.l  Stat.'s.  lilt  los.  Ccr. 
i.ian  trail,..  IIS,  !,!>.  id!,;  Corman'  inir- 
chas,.  ..f  -hips  fr..ii,,  U'l;  k-nernmcnt  ai,l 
t..  shippiiit.  ll'll.  IL'T.  1:10  l.'ill  l.-,i>. 
JJ.ri'iiih^^conliacts.     )J!,;     coi  orric     lioat«; 

V'''*-  .t:'^.    -•**''.    -■^":     -Xmetic-an    \  cshcU 
tor.   "(1!,. 


rnmcnt    .lid    to    shi 


lipiilK. 


Ocean    Steam    .\.i\  ication   Co,.    i:;;i. 

Olficers  and  crews-  insurance,  (11.  (U-   cilu. 

I  at  I'll       1!!.-.,     IllT.    , par's.,,.      ,f     uaseK 

..f   liiitish  .in. I   .Xnnriciii   tramp  steamcri, 


IN!>KX 


;5:»5 


Pacific  Mnil  St«m»l.in  r  in.-    Ul.  t»***    nCO. 
I'antu     ■'uain     NiuiKiT'""    i   -.     l-^'l.     I"*. 

1  io   in.  M'j. 

l'.ir4kti'V :   *truH  tni[Kitt«,  >*1*. 

I'aran.4   river,  uinKtani  »himinn  Rfain   uiovr 

rrifnt-*  fmni,  1'" 
i'tnttituLir    atiil   ( >rtciital    Suam    N-tv  i»;.ili(Jti 

( ...  no.  h:: 

rcnr.     nrv,n     print     »mp'U(<»,     I IH;     ^.ivrrn 

unfit   i\u\   tfi   iftiippinK,    l~tl, 
I'ir/.  I  harlr-.  2TJ.  JiHi.  LMHI.   Jit".   I'llH.   :i07. 
I'latc    Ktvcr,    trump    «hip*    r-iit-H    'm    IuitiImt 

Uk   >■':    fuoci  rxport«,   H4;    wu<i|   biiHint-ss, 

hi.  tonfircncc.    HIH. 
IVvulmit  <iperdtMiii«:   trciKlii   tnonry,   11.  i'<>al 

car*.    47;    traffic.    7tl;    railway    rrsuurccs, 

'J(>5.   Kilxir.  l'.">n.  •j.Mt 
Pnrt  ami  Iran  si  I  Kxiciitivr  Coinniittce.  l.'I*, 

101. 
I'nrii    and    harhur*;    cinKcsliitn.    TU  .'lU.    4(t, 

47.   ^H,   N7.   5>H,    IflO  1(14.    1H4,    lUS.    J04 

liOtt;     .'iitiinni<4tratr.  r     aKcncic-^,     4H,      l.Mt, 

irti,  m.'t,  L'dii,  cjrj;  Liitor.  nu.  i »*.-•; 

gnvtrnnunt  cnntml,  ltd!.  n;:t.  IH4,  'J\'2; 
tau*is  tor  mnjjcHtinM  in  Aiiirrica.  -'Ml, 
cffortH    tt»    rrlic^c,    I!»H,    :.M»H.    2m.    '2VJ. 

T'orttiKHl  drain  «itpplu's  (ur,  H4;  friod  im- 
pnrtH,  N.'t;  (■friiiaii  trade,  UH;  p(>«ia)  ttub- 
vcnlinii*.    i:ui.    l.-il 

IVmtwar  stiippiiiK  policy:  situation  at  end 
of  war.  .'((»K.  imp<>'''«ibility  of  ynicral  na- 
tional indcprndriic,  .'UO.'tl;.'.  Ilriliali  -il- 
uation.  .'tl  't-.'Il.'.  X\'2;  <i»rman  iHtlitv, 
;tir».  :tl«.  :tL':t:  Amtrican  hf"dicap-.  '.IV.*- 
li'2\ .  incrcliani  marine  of  X  .iiteil  Matc^. 
a2l-a*,'.'*.  n.tO-.'iriM;  factor*  controlling  fu- 
turt-.  Ul'>'-.'t21t;  coniinuatiim  of  ShipninK 
Board.  .'WH,  a.lO;  tiansitiun  period.  ii'Mi 
X\H. 

Postwar  trade:  war  products,  114;  jiovrrn- 
mcnt  control  of.  jndu.^try.  ll.'i;  nritith 
i>rK.Tnjzatioii  and  plant.  1  Id  1 11»:  mm- 
pftition,    llil,    12'i;    cummcntit,    IIJI  3L*:t, 

n4(»:i4i'. 

I'rffcrtiHtal    railway   rat;  s,    !*-*!>     i:if»     |47, 

14H. 
I'rintf    I.inc,    H*.    1 1. 

Kaiilcri:  damaKf  tjone  hy.  4i*.  ti',i,  .'.1.  in- 
surance aK.Titi^t.  ."»1 ;  tftccl  on  in'^urancc 
rate-*,    't'.\. 

Railways;  congestion.  4tl.  liCt.  '2tt7t.  aO»); 
Jlritish  control.  Hi:;  preferential  rales. 
IJ!/.  i:iO,  147,  14*^;  American  cfTorf*  to 
relieve  cnDKcstion,  1  !>K,  IMO;  consolida- 
tion  of   systems,    L'Ori,    (.nr   shortage.    '2***\. 

Heeonslruciion.  Mritish  Minister  uf.  11»>, 
117 

Red    Star    r  ine,    142 

Kfgistry:  American  owned  ships  under  fit  it- 
i-li  fijiK.  42.  ;!27 ,  foreinn  ships  adniitlrd 
to  national  rrpi^iiry,  12M.  120.  144.  14»i. 
1H7,  322. 

RiviT  IM.ite  (■onfcrcncc,  I01». 

Kiver  traffic.    I'.tM. 

Kivet*rs,   rivalry  amoni*.   .'l(t:t,   ;;n4. 

Royal  Mail  Sleam   I'ackct  to..  i;i:i.  14:;. 

Runciman,  .-itr  Walter,  170,  221,  245, 
note  7.  25!*. 

Russia:  ^.-rain  export*.  ''.*►;  effect  of  dosing 
of  (Mrdanelles  on.  7.";  ilecreased  vhip 
pir-K.  77;  small  trade  rtitlt  7S;  diaKrani 
showiiiK  vc-^se!  iitovt-m.-nls  to  I'nited 
KinKdoni.  7i>.  122;  new  steamship  lii  -, 
of,  Ktl;  trade  with  I'tiiteii  .States,  !K1;  gov- 
ernment  aid   tu  shtpi»inK,    I2»l,    l."l. 


SaiHnf  vctw! .  ffovcrnmrnt  cnnlrol.  202: 
exchange  iHtwteii  Kraiue  and  America. 
2ti| ;  on  I'atit'ic  Ocean,  2<>1;  Mandirdiicd. 
22*'. 

.Sail    Irancisco   Shipbuildmg  Co.,  2.'t"t,   242. 

Scandinavia :    pr<'war   conmiercial    t.oii'liiM-ii. 
H.  14:  enemy  trade.  43,  4.',  1HI;  Anurtian 
lines  to,   Hil.   jiovtrn-nent  aid  to  ^hippmu. 
loO;     war    prorti-.     I7l«       .Stv    iiljt    Noi 
way.  Swf-ien.   hinni.irk,  re^peclivily. 

Scfewub.  (  hartes  M  ,  21»7,  21»h.  ;10(I.  :i02. 
;«*:(,  aoti.  :w»7. 

Seamen's  division  of  War  Ritk  ln»uratic<r 
ltu;cau.  ttl. 

Severn    River    yar«N.   2tllt. 

ShipbuitdiitK.  technical  devr!opii<ent  of.  dur> 
ing  war:  naval  work,  217;  m'Tehant  vet- 
•cU.  2lM;  eorrug.Ktd  ships.  21>*;  stand- 
atdi/ed  ships.  2I'.'-22H;  unsinkablc  shins, 
22H;  lu  w  metbfHis  of  construction.  2;h*; 
new  materials.  2110  2411 

Shipowners:  i.rofits.  I.".tl  l.'M.  I7:i,  17N. 
IHi.  IS,-;.  24^.  2.Vt;  troubles.  I.T4.  KC. 
177  nil.  IKl.  im»,  20!.  ::(>4  2.S.S.  ;t2ii. 
tinanccs.    I7tt  Ih|. 

Shipping  ailmniisii  .tion  ( .Vtne-ican)  :  Ictti" 
lation,  1h7.  lAfl'  IM»l!iI.  II*:*:  mcreas 
ing  shipping  facitiiies,  I'.i.'t  P.ri.  iiiN.  'Jh»; 
increasing  »upply  ot  vnlnrs.  I'.K'i-lit*;  rt  ■ 
arrangement  ()f  rcsniirci".  11'"  20'_';  nitd 
uf  organization,  2t)2-20.'i;  traffic  con(*s- 
tion.  11»H.  2tt.".  2)Kt;  t.-ntroi  ..f  -hips.  I««h. 
VX\.  2*MI;  organi/ation,  2t»N  2l.'t;  am^ 
nierce  lontrol  lo  relieve  shippinu, 
2i:t-21.*>:  condition  "f  industry  at  he«m- 
ning  of  war,  2tin-271;  SbM)pinK  Hoard, 
271.^,07.     Si',    itito  ShipptuK    Ituaril. 

Shipping  administration  (Hrr;-.n):  rcMuisi 
tion  pojic).  I j.'M.'O;  pro:,rn*rin«.  I.'itl, 
ITm;  taxation.  ITiM.  \1'A,  17.';  o-i:ani7a- 
tion  and  results,  I!)!.'  IDUl.  K>u  1*1": 
Control  of  port-'.  UtOIlU;  MiniMry  ..f 
Shipping,  1*17  1 7i  .  control  over  ir.ercan- 
tile  marine,  171  174;  revenue,  17.".  17*1; 
tiii3ncv>  of  shipowner",  17*I-iM(»:  aid  to 
Alhe-'.  1H1.1.»«4;  mntroi  .,f  yar-N  and 
r ut jnit.  24 4-2." 2;  -itatu-i  at  beginning  •«( 
Hn",  2." 2.  2.";i;  organization  and  nsults 
of  Kovtrnment  control .  2."»:t-2tl2:  shi{,. 
building  nrobleni   am'   prospects.   Jttl'-2tt4. 

Shipiiing  Hoard:  functions,  ID.'i.  KM!,  11H». 
2ft2,  211.  legislation  concerning.  iH'.t, 
ini.  }*Xi.  271;  aitpointmtnt.  I'.rj;  in. 
crcasin;-  shipping  facilitie-'.  1!K*.  IIM,  2N;t. 
2811.  2!"."».  ;tO:t  :m7;  etforts  to  relieve  jM.rt 
congestion.  I1KM.  2(»H.  2t»'.».  212;  control 
of  ra'es.  MM».  1MH»;  conHirt  of  authority 
with  War  an«l  \avv  Departments.  20L*. 
204.  211;  delays  .uid  difficulties.  2>*?. 
2H.'  2iK!,  21»H-:i(H;  tirst  eiKich  in  admin- 
istration. 27.'I-2HO:  second  ep^K;h,  2S0- 
2!H>;  present  epoch.  2141:107;  continua- 
tion after  war.   :i21».   .i:tO. 

Shipping.  British  Minisiiy  of:  personnel. 
41,  40.  1ti7;  crr,ition.  L'tO.  KMl,  ltl7; 
changes  in  polic>,  l(l>*;  methods  of  work. 
!*>;»  174,    170;   departments,    170. 

Shipping  control  cttmmittees.    1."!*.  211  2i:! 

Shipping  Controller — see  Macla,,  >ii  lo 
sejih. 

Shipping   Co:incil.    2i:t. 

Shinping  policy  after  the  war-  v..-  Postwar 
shipping  iK.>licy. 

Ships  Licensing  Coniniittet,    15!*,   IflO,  n-ite 

Skinner  and  Eddy  Corp.,  2!M1. 


nr,« 


INDEX 


Siticty    "•    N»v.-.I    Afchitrtit    •ml    Murlnf 

KntlMlvrr*      fHtltlnn    .if,    -NI». 
S-'llHl   Africa     in%iir4nir  f;tfr^  fti,  Vi;  tiffftiti 
lllllMirt4,   fH  ;    |'"«1tl   •n»i\rttt»<iti«,    l:i»l 

Si'Uin   Amrriia     I""-  t-nfi"-.  *.  •!'>  i '   "' 

ti-rrifory.  |f*i  tramp  Itatfit.  -3;  Krairi 
i-atxirt*.  34;  Amtricnii  trmlr  uilli,  4ft, 
lf>7  1^1.  iii«tiT«n»r  r.Tl<«,  ■■-,  ■'•:!,  '•*. 
It.".,  co.ll  supply,  'X,  llnli.h  trailc  with, 
II,'.  IHi,  Irriirli  ira.lr  »iUi,  llil',  ci).i«l- 
ni.r  -ra'tc.    \M. 

SottlVtrn    Pinr    Association,    HtHl. 

>piiiti  Itnt'  trafftc,  H;  urmu  miiM>rt«.  .'fl: 
frailr  (i(,  in:  coal  •iiiiply.  41;  ilunram 
.itiottinir  .■f!»«cl  t.iovcmiiit*  f'  f'nitcl 
Rtnedorn  7t»;  foi«l  import-,  h.'f;  Ctrrmati 
li.i.li,  ll».  Ira.lf  mill  I'liiti'l  State",  ll't. 
new*  print   exports,    11**;    itovrrtittirtit   .Tol 

i„  ,ii,p;.nit.   rjii.  luT,   i:i<i.   i;i«i,   i:t". 

l.*M;   concrctr   vessrts.   I'ft*. 
Stio'lartlmil    >liiii«;    tuforr    the    war,    2'.'0; 
ailoplcl     liy     t'liilcci     Sf,.tr«.     'Jl''.     Ul'It; 
mloiinvl   tiy   tJrc.if    Brilam,   '.Mlt,   i."'T,   o|. 
position,  •.'L'ft.  :::!1,   L'."i.«t;   yarious  <li»ii»is, 
L"JL',  '.".'h,  '.'.'"li.  .uliantaRcs.  •.•■Jo  ■.•••■i.  i,-,M, 
■J.Vt;     fatiricitoiii    «y«liiii.    •Jl',">  ".'iT,     -•"•7- 
:;fMI,    U*l-,    lioMrnnicnt    conintillccs,    2.M», 
V<Ml 
Statistical     lalilis       insnranri-     rat»s,     I1II4- 
11IIH.    ri7,    coal    csliort.   of    rilllril    Stuti'S. 
77;  rxport«  from  .\riictilina.  HO;  j.^tKinf^r 
liniiortH     anti     ixports,      IHKl-ltll  i .      '•-, 
I'liile-d    Slates    traili-    lialancr,    1!II7.    Ii.'l; 
I'niteil    Stall-    in  ports   of    raw    iiiatiriaU. 
Il)l4'litl7,  t'4;   llrilish  shiphiiil.linil.   1:411, 
'.'."■ri;  .'Vmrrican  sliipliuililinii,  J»M1,  note  ;i, 
Sltfl,   ciiini.arison   of   rriw   cost   of    .\nurl 
can  and   Ilritish   Inniii  steamers,   .T11> 
Steel  »hip»     lofniaati.l  lyi.i.  '.'IH,  staiularil' 
iralion,    \i\  '-'^l .    new    nietlioijs    of    eon- 
>tniction,  L*'J1'.  -."'.".  comparison  with  con- 
crete ships.   I*;i7  "41. 
Stryens.  Ravmon.l  It  ,  ;74.  'JhO 
Snhmarin.    Iloat  to.  "H.'.  :il>.',  n.Hr  3, 
Snhmannrs,   etTect    of,   on    shiii   suiiply,   Il.l. 
:t4,    i;4fi;    on    raw    material    iinporls,    ;iN, 
:t!l,    insurance    f.ir   .l,.i.i,i«i-   liv.    ,".1      efT-ct 
of,   on   insnran- e   r.ites.    ,"4.    .".";    .lecrease 
III   Miccesse-^.    "'.   '.'I!'.',    -il'l.    -'14;    etjortj 
to    avoid,     Ifl.'l.     ships    desiKtlefl    to     flRht, 
-17    -IH;  shifis  designed  to  prevent  dam- 
aic    hy.    'JIN,    '-'-S,    •-'■.'•1.     o:i!l;    hnilt    by 
Treat   Ilritain.   '-'44:    fntiire  of,   USS.  IH'O. 
Suhiidics:    definition    .d    term,     lll.'i;    neces- 
sity.   l-t\:    arKiinients    ailainst.    IL".!;    pur- 
pose.    i:t4.     n7.     l.'IH;    leiiislalion,     1L".I. 
i;t7.    IHM,    i:!!l.    ITill;    results.    i;t7,    l:il>; 
various  systems.   1,'lx.  i:t!l;  summary,  1411 
1,11. 
Sulivenlions;  definition  of  term,   l-.i;  iiostal 
reriiiiretnents.    f.'x.    i:!;t.    ):14,    i:i7;    Hrit 
ish,      i:ll.      111'-',      l.ll,      1111.      141.      144; 
.\nierican.    I".o.    I.'ll.    14'-';    foreinn    lines, 
i:!!l.  140;  other  countries.   lP.:M.'t7;  leiiis- 
l.iti.iii    concerninil.     14-.     144;     summary. 
1411  l.'.l. 
Slier    Ciinal:    traffic    of.    fs2;    rcimhurscmcnt 

of  dues,    i;tl.    IXLV 
Sticar;   freii-lit  rates.  *_"_'.    17-;   in  .lava.   411; 

llntish  imports.  Ill", 
Swe'len:  line  trafTic.  H;  idle  ships.  ,'(4;  rov- 
ernment  war  risl;  hureau.  511;  decreased 
eoal  !iut>plv,  77;  fo< -!  imtutrt-,  XM.  H4 ; 
trade  with  I'nited  States.  1t:i;  Citrman 
trade,  its,  t'l;  Ilritish  Ir.i'le  liart-ain.  107; 
government  ;iid  to  sliipjiing.  1-11.  1J7. 
i:iO.  i:tll.  l.-ill;  after  th-  war  policy.  Ill.'i. 
Switzerland,   trade  with    United   States.  05, 


Tanker*.  Irt."    m.le  :i    I7'.',  2.'>l 

lardieii,     \Mdrr     too.    I  III 

l«««tion:    mcrias.d.     l.'iX,     |,-itl,    I7:i,     17.%; 

rseniplloti  from,  I'll,', 
Tl.|e-V\mrr  t  ■- il  Kschinse.  I".  I'OX.  o|HI 
Traile  jiaralvsis  at  outbreak  ■  f  war.  ".•11  ;io. 
Tl,  74,  early  revival,  .'tl  ,  disturliaiier 
and  liniitation,  1.1.  .-i.l,  .-,4,  .VI,  7.'i.  7il>i;i; 
■ovrrnmenl  control,  4:i.  (Ml  1 1 4.  IJIS 
J1I\;  dependence  on  ,narine  insuran.'f,  40, 
no,  71',  (,ut,irs  that  have  altered,  74 
70 .  diaurani  showuiK  vessel  movements, 
711.  worid'n  (innl  .upidv-  h:|K.-,;  dislnra. 
turn,  K,"  IMI;  ilreline  of  Kuropean  ex|iorts, 
IMt.  lapnn's  uatiis.  IMloli;  ,\meriean  iradr. 
If.' IHI,  I'M,  with  the  enemy,  !»l;  Uritiah 
blockade,  07  HMI;  Cnited  Stairs  policy, 
too.  |ol.  lo.'I  to7;  nations  as  hamainrrs, 
I07  1I0.  .cienlific  reslriclion,  IIO-IU, 
2i:i,  JH;  statistics.  77,  no,  hi',  04,  lOM; 
after  t:ie  war      o-e   I'o-twar  trade 

Tradr  ui^ions-  conflicts  iK'twren  Rovrinmrnt 
control  and,  Htl.  •.'4N.  l.'4l>.  i'ol.  strikts. 
171*.  L'40;  relation  to  caiutal.  '-'47;  con- 
ditions in  fireat  llrilaiti.  1^47-1.','*.*.  affree- 
mrnt  concerning  munitions.  0(7.  -4H, 
240;  a'Initision  of  women.  -'IN;  airrc. 
metit  concrrninK  shiiihuthlini.  -'4H;  r«- 
laxati.m  of   rules.  L'411,   2.*il. 

TradinR  with  the  enemy,  7."i,  IMl;  .\meriean 
act,  101. 

Tramfi  »hii»s:  description  of  ti.,ifie,  .•-7:  pre- 
vention of  eoiniietitton  by  line  trathe,  I'J- 
14;  Ireiisht  rates,  llt-2L',  lllue  Hook  rates, 
ins,  ISO;  re>|ui>ilinn  of  ships,  ION;  «oy- 
einment  opei.itlon,  170,  com|iarisun  of 
Ilritish  and  .\merican  crew  cost,  .'111*; 
future  of,   .'l.!!'. 

Transfiort    Ilepartment.    1*14.    170. 

Transports;  i>rewai  piovisioits  for,  1,'I0, 
t,'l,'l;  Ktreclor  of,  k'><t;  a<li  litiislrative 
agencies.  I'll'.  1114.  170.  I'll.  ::l:i;  mis- 
takes made  in  otieralion.  111,'!,  L'O'J,  *iOM; 
Kovernment  control,  INl.  I'l'*;  new  types 
of  iihipa,   21H. 

Tuga,  irovernment  control  of,  200. 

Tjrne  River  yards,  251. 

L'nsinkable  shiiis.  -'2H.  22!*, 

Wages;  disputes,  1112;  increased,  170;  un- 
settled conditions.  ;i0'2;  .\niciican  con- 
trol. 18M;  Ilritish  control,  ■^f.  com- 
l»arison  of  -Nmerieau  with  l.nu.i-.!!  ami 
lapanese.  ;ll!».  .'120. 

War  Department:  vessel  Mipply  f-.-.  100, 
202;  jurisdiction  over  convoy  'ysiem, 
204  --presentation  on  war  Iwtard-.  200; 
Secretary  of.   211. 

War  Industries  Hoard,  2n;I.  note,  .'107. 

War  Oflice,   4.',    I ■"':!,  'JOO,    '2(11 

War  iHtrt  boariU:  personnel,  200;  wiirk  of. 
210. 

War  risk  bureau— -ttv  Goyernment  war  risk 
bureaus. 

War  risk  insurance— jff  Insurance,  war 
ri-k- 

W«r  Trade  Hoard:  forniato.n.  10.1.  2S3, 
note;  control  ,,f  e.x(iorfs  ;tnd  imports, 
10.",.  112.  214.  :in5.  note;  statement  con- 
cerninn  Norway.   lf*R. 

Wehh-I'omerene    llil!     110 

Weir  river:   vliipliuildiiiu  olan  of,  'J.'iO. 

Welsford,  J.  II..   l.Ml.  175. 

West  Indies;  line  trafiie,  H;  ships  during 
war.  '200. 

Wcstinghousc  Co.,   22<J, 


INDEX 


35 


WhHr.   liniM  B.  «S.  2M 

Whiii:  M.I   Uint,  I4J  , 

\\||.nn.       Wii-xlc.W.       I'M,      1I«.       1»».  "". 

w'„','i„"!lHp..    .,.ml.,.ll..'wn.    S2T.  2I»1 

,.n..4l  ..I  .1..IU.1IV,  a:H>.  ■.•:•<.  .i".  ."", 

,„n..,n    »lih   iTctrir    'hi|».    .'S».  .W. 

Ilo.irih    lyp*.    ■-?•!.    •'"ttru    <l«"«n.  «T, 


''TO    2***-    "'^i'    '  ■    m»">ntmtn1   M   ctm* 

rinKt...n. ;.'«».  !«•  •"»••"?),'■  Ji;'"^  ,,. 

\V,..il  ilillteuli*  In  •hippini.  1.1.  7X.  w.  "T! 
.nlrrt..it  Ii4ilt  in.  •'•.  ""f.  .\l|ltnllM» 
rx|M)rl>,    l*»T.  .*»,.  H  »« 

\\  .111.1    g.ivumliUM.    i.'n'liiol    Uf,    .14 J  :!.«<) 

,i"vfi."|.'"""    ■■'     :•<■••'*«;   «"»•  «•>"'''• 
llun>  of,  a4U  3au. 


M 


